The economic rot spreads. [...] because before consumers changed their behavior, personal consumption expenditures were 70 percent of GDP, naive Keynesians - after intoning that "consumption is 70 percent" of the economy - will demand government action to restore that level of consumption. Perhaps foremost among these errors is their mistaken presumption that the practical imagination and initiative of entrepreneurs is as narrow and as anemic as their own in fact is. if it were true that entrepreneurs were so dull that none of them could ever figure out how to employ a greater supply of saved resources in ways that improve the operational efficiency of a factory, increase the quality of a consumer good, and enhance worker training so that more will be produced in the future when those higher retirement savings are drawn down, then perhaps increased savings would always spell economic trouble.
Thoughts on Freedom Naive Keynesianism:A Failure of Imagination BY DONALD J. BOUDREAUX
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