Can John Lynch capitalize on the slim advantage of Keynesian economics? .
First off, Obama is couching his spending addiction in Keynesian economics. He has to realise that it won’t actually work unless he has spending a) on projects that will have a positive economic impact on long term growth outside of government, and b) tax cuts that actually expand economic opportunity and stimulate short term growth in the business community now.
Tax cuts are the key. They create long term stability and attract business and investment that will eventually increase revenue to offset the initial deficit spending. Government spending never creates more revenue for the government, so when deficit intolerance intrudes on poor spending choices, taxes are raised–killing growth–and the Keynesian model collapses, creating economic stagnation, and a drawn out recession.
President Obama’s stimulus is destined to fail without a major retool because his spending is loaded with handouts that do no significant long term economic good, and what he calls tax cuts are actually welfare checks that do no short term lasting good. Keynesian spending was never meant to fund art or special interest groups and if Obama persists he will have stimulated nothing of lasting value, including his usefulness as a leader.
But John Lynch has an opportunity to make New Hampshire the place to do business—partly on the Federal dime–if he has the sense to take a chance and makes the right decisions. He may get up to 300 million, and if he handles it properly, he might save New Hampshire some of the pain other New England states are pre-destined to suffer because of their tax policies.
