jueves, 17 de septiembre de 2009

Keynes applied to the Spanish economy

The Socialist government is applying the principles of Keynes to the Spanish economy but in a way so lax that is arousing much debate by the opposition
In times of crisis when private investment is collapsed by the null expectation of the marginal efficiency of capital cost of benefits that make new investments the state must intervene by investing the capital gains or surpluses generated in good times to revive the economy, such a small investment so that we will approaching the levels we had before the depression. This is what government is doing with his plan but this plan is in the light of what one can do to dig a hole using five people, to open another two months and re-plug hole. They are not creating infrastructure to generate employment but patches permanent makeup unemployment statistics and short-term relieve the plight of families.

Aid to the unemployed are indeed necessary but can not be given indiscriminately without seeing the revenues that have or have obtained before coming to this situation. You can not give 400 euros to someone earning 200,000 euros a year and unemployment has remained in the same way as other unemployed whose salary was 600 euros per month as was done in child allowances granted.

Redistribute wealth through taxation is another Keynesian principle but we are the same as at the end are paying taxes just as those who have been most damaged by the crisis such as the middle class and small and medium enterprises, precisely the only we can draw from this crisis while the very wealthy and corporations have the means and the necessary advice to evade capital to tax havens.

The VAT hike proposal is another incongruous because if this is what is to revive the extent that consumption is going to do is an environment of low wages and mass unemployment is to suppress any increase thereof.

The application of Keynesianism by the government is not being implemented properly, but seeing the proposals of the opposition is the lesser evil because what they propose is not simply the reduction of public spending in a ruthless liberalism refers to the measures taken by Hoover in the Great Depression exacerbated the effects well.

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