ks.234
Half way to Infinity
Keynes quite rightly focussed on full employment to balance the economy, a simple idea that was overthrown in 1979 by Monestarism and a focus on inflation. The immediate result was both higher inflation and higher unemployment.
Monetary policy is certainly not the answer and decades of experience has shown that it never has been as can be demonstrated by your observation that it is at best both the supposed answer to, and the cause of, economic problems. At worst, where it has been successful, the consequences have been unemployment and in latter years, increasing low pay and poorer working conditions
Fiscal Policy does not necessarily mean raising taxes because government spending is not funded from taxation. Government spending could, for example, be used to offer a well paid job with decent working conditions to eveyone who wants one, which would not only be an automatic economic stabiliser that would redistribute wealth and help the working poor, but also tackle inflation.
Keynesianism was not without it’s faults, but it’s emphasis on full employment as an economic stabiliser was, and is, correct. We now have much better economic tools than were available in the New Deal era so we can easily get back to real full employment with decent pay and conditions for everyone willing and able to accept a Guaranteed Job.
Taxing the wealthy would be a good idea for sound economic reasons, but we need to be clear that tax does not fund spending because such a false narrative it is what feeds to the story about the supposed link between tax and government spending, a story that is used to impose austerity and cuts funding to our public services.
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