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Monday, January 26, 2009

My life could have meaning

but only if the stimulus bills don't hurt the economy too bad.

Of course, the intent is to "help" the economy, that great abstract conception of the sum of trillions of individual transactions, but it can't.

The problem is that macroeconomics- and hence the retarded Keynesian approach that perpetually f***s us all- relies on a fallacy that I'll call "macro-demand."

Demand for any given product is finite. The macroeconomic view seems to be that aggregate demand is the sum of all these lesser demand curves, but that's incorrect.

Total demand is... more or less infinite. It equals production, at all times, so long as we count totally useless production of crappy goods to be consumption.

The individual demand curves represent the desired allocation of society's productive capacity.

Fiscal policies that attempt to "boost demand" (which is already infinite in the relevant respect, ie in the amount of useless junk consumers want to purchase) simply results in a reallocation of production away from investment and "targeted" consumption to whatever random and usually stupid pork projects the politicians want.

This reduces output from a subjective standpoint and reduces economic growth.

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