John Maynard Keynes was wrong. I think everyone on Earth, outside of government and a handful of doctrinaire professors, can agree on that. Every time we have tried to adopt Keynesian policies we have simply ended up digging ourselves deeper into debt. Even as long ago as FDR's misnamed "brain trust" it should have been obvious that the Keynesian theories of deficit spending our way out of recession was showing its flaws. Or even earlier when Von Mises wrote essay after essay showing the holes in Keynes' theory during the 1920's. And certainly after Hazlitt's definitive refutation of Keynes' main work line by line in The Failure of the New Economics, it should be clear that Keynes has nothing to offer.

And yet we are getting "stimulus" checks this year, fully consistent with the worst of Keynesian nonsense.

Let us just make this clear, consumption per se does nothing to "stimulate" the economy. If it did, the government could just run the printing presses nonstop, distribute the money in five pound sacks and we could all shop our way to opulence. It is production which produces wealth. Yes, there need to be consumers for what is produced, but, as long as we avoid meddling with the monetary system, consumption is supported by production, so, without monetary inflation, production generates its own consumption. This was known two centuries before Keynes, and it was only his attempts to invent a justification for government foolishness that led to every economist forgetting this simple truism. Despite the claim of Keynes, Say's Law is absolute, provided the state stays out of the money printing business.

So, if Keynes is so obviously wrong, why are his theories still with us? Even in the era of FDR there was more than enough evidence he was wrong, yet FDR and his brain trust followed his theories to prolong the depression another eight years. Why? And certainly by the time of Nixon the theory had been debunked, yet we still ended up with the Keynesian justifications for the Smithsonian accords. Why? And again during the Carter administration not only did we get out of control inflation coupled with economic stagnation, but the experts, puzzled by this "stagflation" tried to cure it by printing still more money. Why? None of this makes the slightest bit of sense. Why would anyone follow a theory that not only has been academically debunked, but proven so disastrous in every real life application.

The answer is simple, Keynes provides an academic justification for what politicians want to do anyway. Face it, our politicians are neither rocket scientists nor great economist for the most part. Fewer than 1 in 10 probably even knows the basics of Keynes, yet they have absorbed his theories from the atmosphere around them, accepting them as economic truths. Why? Because they tell politicians to do what they want to do anyway.

Keynes tells politicians that deficit spending can somehow make up the mythical gap between spending and investment. That there is no such gap doesn't matter, politicians always have more they want to buy than they have money, so deficit spending appeals to them. For a politician to be told that deficit spending will actually strengthen the economy is like telling an alcoholic that four quarts of whiskey a day will prevent cancer, you will not get any argument.

Which brings us to our current silliness, the "stimulus check". To the doctrinaire Keynesian, the "multiplier' effect will somehow take this piddling check and turn it into a massive boost to the economy. I won't go into the errors of this, as I have dealt with them elsewhere. The errors really don't matter. What does matter to the politicians is not the benefits promised by Keynesian theory, instead they are simply delighted that Keynes gives them justification for sending the check. After all, by sending the check, not only do they get to essentially buy votes with public funds, but they also appear to be "doing something". As a politician fears nothing worse than giving the appearance that he is not involved in solving the problem du jour, it is a blessing to them that Keynes' theories justify them in sending out vote buying checks in order to prevent the anticipated recession.

And, sadly, that is why Keynes will always be with us. By providing the economic myths that justify what politicians want to do he made himself the favorite economist of the political class. And that guarantees that these errors will need to be refuted again and again. Until we finally get rid of the myth that prosperity somehow comes from the state, Keynes will continue to be revived again and again.