What’s wrong with Keynes

Consumerism Is Keynesianism por Steven Horwitz:

One of the most pernicious and widespread economic fallacies is the belief that consumption is the key to a healthy economy.

This belief is an inheritance of misguided Keynesian thinking. Production, not consumption, is the source of wealth. If we want a healthy economy, we need to create the conditions under which producers can get on with the process of creating wealth for others to consume, and under which households and firms can engage in the saving necessary to finance that production.

Putting more resources in the hands of consumers through a government stimulus package fails precisely because the wealth so transferred ultimately has to come from producers. This is obvious when the spending is financed by taxation, but it’s equally true for deficit spending and inflation.

With deficit spending the wealth comes from producers’ purchases of government bonds. With inflation it comes proportionately from holders of dollars (obtained through acts of production) whose purchasing power is weakened by the excess supply of money. In neither case does government create wealth. Nor does consumption.