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Economics broadly speaking is a type of social science that attempts to objectively analyze the benefits and lack thereof regarding production, distribution, and consumption of goods and services.
Supply-side economics is principally concerned with the productive capacity of the economy. It is called "Reaganomics" or "trickle down economics" in the United States. Its basic philosophy is that wealth from the wealthy will inevitably "trickle down" to the middle and lower classes.
- Main Article: Capitalism
A democratic republic practicing capitalism consists of relying on the many personal decisions regarding levels of supply, demand, price, distribution, and investments of privately produced and owned materials and services. This democracy/capitalism model is seen as the most consistent way to govern in support for individual liberty. In defiance of a progressively burdensome and over planned economy that new liberals tend to agree with, capitalism allows individual empowerment or freedom from the local, state and federal government through accumulation of private property which develops a private sector of the economy. Classic liberalism compliments capitalism, both revering limited and representative federal regulation upon the voluntary trade within free markets that is necessary for honest operation.
During the 20th century in opposition to classic liberalism an intellectual critique emerged based upon John Maynard Keynes (born in 1883) (Keynesian) economic view, arguing for increased international and national economic intervention. A British economist Keynes rose to fame during the end of the Great War (World War I) through critiquing reparation payments imposed by the Allied Forces against Germany. Even more so critical was Keynes of the Council of Four that consisted of Georges Benjamin Clemenceau of France, Lloyd George of Britain and Woodrow Wilson of the United States and a minor member of Vittorio Orlando of Italy. Keynes determined that the cost was to great for Germany and it would remain politically unstable as a direct result. Later in his career John Maynard Keynes, at the 1944 Bretton Woods Conference he was the main architect behind the formulation of the International Monetary Fund.
The IMF is still in existence today becoming so universal in fact that all Western governments, indeed almost all of the world has adopted this globalist view of controlling national economies by internationally fixed exchange rates, and by merging all borrowing and lending by nations into very few international institutions that interject stability after crisis. This limits freedom of the federal government of a specific nation, when a member of the IMF and thus the world community, to embrace free market individuality of business policies isolated from overbearing external pressures. New liberalism, or a Keynesian model of economics within domestic politics, started reshaping laws of national governments during the opening decades of the 20th century. In accordance to international bureaucratic will Keynesian economics remains an overwhelming intellectual view of governance. Keynesian economics with an international adoption was furthered in the light of The Great Depression of the United States and the New Deal. The New Deal was the federal response to what it deemed a crisis, although its scope and application became unconstitutional and ultimately thuggish. The unprecedented federal involvement was seen by the international intellectual elite as proof that capitalism was broke. The international community thought capitalism was weak and in need of governmental involvement, proving the socialist model of Europe that was brewing. Not only did the New Deal determine a new outlook or argument against capitalism defended ever since with great fervor, but it encouraged an intellectual culture that celebrates overreaching at the federal level by way of Keynesian economics.
Toward the end of the opening decade of the 21st century a resurgence of Keynesian economics in the U.S. is seen by dramatic government activism increasing reach deeper into all aspects of the economy. This is accomplished by spending rather then spending cuts and tax increases rather then reduction on individuals and corporations. The Global Financial Crisis of 2007-2010 is the catalyst to further spending by the federal government and thus inherently incorporate the Keynesian model within U.S. domestic policy. Elected politicians of the Congress of the U.S. voted to pass trillion-dollar stimulus packages and other highly expensive pieces of legislation to help the economy. Large sums of money were also given to the Keynesian designed IMF for foreign development in the aftermath of the Global Financial Crisis in which the European Union member Greece was uniquely hit. Greece could not withstand the additional impact of the GFC (Global Financial Crisis) and brought to the surface substantial debt burdens urgently showing need for an economic bailout from the world.
- ↑ "capitalism." Merriam-Webster Online Dictionary. 2010. Merriam-Webster Online. 7 July 2010 <http://www.merriam-webster.com/dictionary/capitalism>
- ↑ Capitalism By Economy Professor
- ↑ Wikipedia:John Maynard Keynes By Wikipedia
- ↑ The General Theory of Employment, Interest and Money By John Maynard Keynes. Page xv.
- ↑ Greek Debt Crisis Won’t Spread Through Europe, Officials Say By Christian Vits and Rainer Buergin ; April 26, 2010
- ↑ The Great Depression with Amity Shlaes Amity Shlaes interviewed by Peter M. Robinson
- ↑ Obama’s Desperate Search for Effective Stimulus Published on September 8, 2010 by J.D. Foster, Ph.D.
- ↑ Keynes vs. Hayek = Obama vs. Merkel? By The Foundry. Posted June 25th, 2010
- ↑ 2008-2009 Keynesian resurgence By Wikipedia
- ↑ The Do’s and Don’ts of an Economic Stimulus Posted January 18th, 2008
- ↑ Scandal: Less than 7% of Trillion-Dollar ‘Stimulus’ Spent on Infrastructure By Connie Hair. 09/08/2010
- ↑ Implementing Obamacare: A New Exercise in Old-Fashioned Central Planning Published on September 10, 2010 by John S. Hoff
- ↑ China to buy Greece: Why I am suddenly less comfortable? Posted by Clyde Middleton on Oct 4 2010
- ↑ Presto: Another $750 Billion Wall Street Journal. April 14, 2009
- ↑ Who's on the Hook for the IMF's Greek Bailout? Wall Street Journal. May 10, 2010.
- Big Government blog postings By Dan Mitchell of Cato Institute
- Keynesian Economics Is Wrong: Economic Growth Causes Consumer Spending, Not the Other Way By Hiwa Alaghebandian for American Enterprise Institute. Center for Freedom and Prosperity