KEYNESIAN ECONOMICS 101
LEARN HOW WE CAN EMPLOY EVERYBODY
BY REBUILDING OUR INFRASTRUCTURE
WHILE REDUCING OUR DEBT RATIO
BY SPENDING MONEY WE DON’T HAVE!
Please join my on-line economics class
by clicking on the first lecture below, after the dedication.
You will not be asked to register, pay a fee, keep a schedule,
do homework, or pass an exam for credits, diplomas, or degrees.
You will not log-on, enter a user name, or remember a password.
But if you join and study, you will learn something you need to know.
Economics is too important to be left to the economists.
And the most important and most controversial question in economics,
dividing our government, our voters, and perhaps your family,
is the theory of British economist John Maynard Keynes (1883-1946).
Our current “Great Recession” brought us plummeting tax revenues,
and exploding recovery costs and a large federal budget deficit
and hysterical cries for less government spending NOW,
exactly when we should be employing our idle resources
to rebuild decaying and obsolete infrastructure.
With effort, anyone with an above-average IQ can understand Keynes.
But that’s only half of us, so our half must out-vote the other.
And that’s why I’m offering this free learning opportunity.
Below and overleaf is a concise summary of Keynesian ecomomics
that requires only a 12-year-old’s knowledge of algebra.
You may find the summary useful as an entrance exam.
If you cannot follow the math, my course may be too difficult for you.
THE KEYNESIAN CATECHISM
Congress can end our Great Recession with CONstruction
the same way World War II ended our Great Depression with DEstruction,
If Congress granted a stimulus large enough to employ everybody
who can work - à la World War II = our unemployed could rebuild
our infrastructure and pay enough taxes to help finance the project.
Stimulus is not magic. The magic is in the multiplier: M (M ≅ 2.5).
Our National Debt ≅ $14.5T and our Gross Domestic Product ≅ $14.8T
so our Debt Ratio (DR = ND / GDP) ≅ 98.0%.
If Congress granted S dollars as a stimulus, then GDP growth = M × S.
Since GDP growth increases tax revenue and, as a percentage of GDP,
our tax burden for all levels of government = TB% (TB ≅ 30)
and our revenue growth = GDP growth × TB%
= M × S × TB%,
therefore our infrastructure purchase discount
= revenue growth / S
= (M × S × TB%) / S
= M × TB%
≅ 2.5 × 30%
≅ 75%, which ain’t bad.
But if M > 3.3 (Yes, it’s possible!)
then M × TB% > 3.3 × 30%
> 99% infrastructure purchase discount
and that comes with full employment, too!
If S = $4T, then the new ND = ND + S
≅ $14.5T + $4T
≅ $18.5T
If M = 2.5, then the new GDP = GDP + (M × S)
≅ $14.8T + (2.5 × $4T)
≅ $24.8T
and the new DR ≅ $18.5T / $24.8T
≅ 75%
and ΔDR = the new DR − DR
≅ 75% − 98%
≅ −23.0%!!
Honor students! Prove: ∀ M ≥ 1, DR > (1 / M) ⇒ ΔDR < 0
But whence cometh the multiplier M? And what determines its value?
This course answers your questions about Keynesian economics.
I have tried to simplify the theory
so that every citizen with an above-average IQ
can understand the facts and logic necessary for an informed vote.
Did I succeed? You tell me!
Your on-line comments and questions are welcome.
I did my best. Now it’s your turn.
Please click on the first lecture in the list below, after the dedication.
Marvin Sussman, retired engineer ©2011, all rights reserved.DEDICATION
I dedicate this web site
to my fellow “A” troopers
of the 4th Cavalry Reconnaissance Squadron
(Mechanized).
My “Fighting Fourth”
was a regular US Army unit
with a history reaching back
before the Civil War.
Before entering WW II combat,
all the commissioned officers
were graduates of West Point
or the Virginia Military Institute.
The non-commissioned officers
had all served five to 25 years
in the mounted cavalry.
These were men who devoted their lives
to the defense of their nation.
All the privates
were wartime volunteers
from every corner of the nation:
Brooklyn Italians,
Chicago Poles and Jews,
Carolina Appalachians,
Dakota Sioux.
For the D-Day assault on Normandy,
in the wee hours before H-Hour,
“A” troop cleared a fortified island
lying off the coast,
opening the way to the mainland.
My sergeant, Harvey Olson,
of the 2nd platoon,
was the first American soldier
to land on a French beach,
swimming ashore with only a flashlight
to guide the landing craft.
As a boy, Sergeant John Onken,
of the 3rd platoon,
came to America from Germany
with his parents after World War I
and retained a slight accent.
Especially friendly toward Jewish troopers,
he could not understand
why Germany followed the Nazis.
John Onken was the first American soldier
to die on a French beach.
In 11 months of combat,
from Utah Beach to the heart of Germany,
“A” troop,
no more than 140 men at full strength
(and never at full strength),
suffered more than a hundred battle wounds
and 36 deaths,
including two captains
and four lieutenants.
President Franklin Delano Roosevelt
awarded his Distinguished Unit Citation
to the 4th Cavalry Reconnaissance Squadron
for its “...gallantry and esprit de corps...
above and beyond the call of duty...”
during the “Battle of the Bulge”.
In keeping with the highest traditions
of the US Cavalry and the US Army,
these troopers saw their country in peril,
rode to its rescue,
and did extraordinary deeds of valor.
While honoring their service,
may this web site also enhance
the heritage they preserved.
