TheMacroView Episode 15: Real Savings & Investment vs Aggregate Demand Theory

The Macro View

Mainstream Economic Theory is driven by the old Broken Window Fallacy - Increased Aggregate Demand Despite It's Productivity or Lack Thereof Must by Stimulated. The keynesians, as a result have made some of the most ridiculous declarations that one could imagine. From Keynes himself advocating the government bury money in bottles deep in coal mines and let people go dig them up - to Krugman advocation deception of the public and a false threat from aliens as a way to justify massive deficit spending to stimulate aggregate demand, despite it's wastefulness. Tonight we discuss the basic logical fallacies, we discuss the flaws in aggregate demand theory and we close out discussing WHY, fundamentally, private savings and investment as a result of overproduction, that is each individual producing more than they consume (or household), is what leads to real, sustainable, strong economic growth.