Entirety of Keynes’ theory must be implemented

Citizens must learn how to live within their means

Editor, The Record:

Re: Keynesian had worked for decades, Dec. 6 edition.

Keynesian economics would work today, if it were properly applied in a timely manner.

John Maynard Keynes developed an economic theory during the height of the Great Depression era from 1929-1933. The theory was an aid to help govern and smooth out the bumps in the economy during boom and bust cycles in a free market society. In its simplest form, the Keynesian theory has two parts.

First, in a bust cycle, recession or depression, Keynes opined that governments should lower taxes and lower interest rates. Then government should increase public spending for social programs and borrow if necessary. These actions would ease the burden on taxpayers as well as borrowing money during the depression to be paid back in the future boom times. Second, in a boom cycle, bull market or good times, Keynes theory states that government should do the opposite. Increase taxes, increase interest rates and cut or lower public spending for social programs. Now government and borrowers must pay back the borrowed monies used to get through the recession.

When I was in university, I learned that Keynesian economics has nothing to do with austerity and everything to do with balance. When you lend money to someone, do you expect to be repaid? If yes, then it is a loan. If no, then it is a gift. When our governments borrow money from another country, bank or by issuing Canada Savings Bonds, do the lenders or bondholders expect repayment with interest? You bet!

In order for Keynesian economics to work you must use the whole theory. As an example, our former Finance Minister, Mr. Paul Martin chose to use all of Keynes theory, thereby doing all Canadians a favour by cutting public spending in good times to repay our debts. It was tough at the time, but can you imagine how much tougher it would be today? Can you imagine how much higher our debt and interest payments would be if that debt had not been paid down? Our current government is just starting to use the entire Keynes theory again.

When we choose to live within our means, pay down our debt and adjust our expectations to a more realistic level we do what is right for future generations. Our generation should pick up the tab for our choices and actions which will allow us to say “I want a better future my children.”

Randy Cooper

Mission

Just Posted

UPDATE: Wind warning has ended for Metro Vancouver

More than 34,000 BC Hydro customers in the dark on Sunday morning in the Lower Mainland and Sunshine Coast

Downtown Mission: Ready to revitalize

With the bidding process underway, construction could start by mid-March

Guilty plea issued in case where man, 86, was assaulted and robbed

Hughie Stump pleads guilty to break-and-enter in relation to Abbotsford incident

WIND WARNING: Metro Vancouver expecting 100 km/h gusts Saturday night

Environment Canada issues warns of possibly dangerous conditions

Fraser Health asking taxpayers for millions more in health care capital funding

Health authority wants Fraser Valley taxpayers to triple annual contribution to $5.75 million

REPLAY: B.C. this week in video

In case you missed it, here’s a look at replay-worthy highlights from across the province this week

Philadelphia Eagles headed to Super Bowl

After routing the Minnesota Vikings 38-7, they will face Tom Brady and the New England Patriots

Heavy snowfall closes Mount Washington on Vancouver Island

Road to ski resort deemed unsafe, vehicles buried under more than three feet of snow

VIDEO: Dramatic video shows return of rescued B.C. snowboarders

Two snowboarders were rescued near Rossland, B.C. on Sunday after being lost overnight.

Tom Brady leads Patriots back to Super Bowl, top Jaguars 24-20

New England to face winner of Sunday night’s game between Minnesota and Philadelphia on Feb. 4

Coquihalla drivers prepare for snow

Wintry conditions persist, with snow warnings for Coquihalla

Liberals quietly tap experts to write new paternity leave rules

Ideas include creating an entirely new leave benefit similar to one that exists in Quebec

Insurers say Canadian weather getting hotter, wetter and weirder

Average number of days with heavy rain or snow across Canada has been outside norm since spring 2013

Final phase of MDMA-assisted psychotherapy trials to kick off in B.C.

Doctors hope to get psychedelic-assisted psychotherapy legalized in Canada and the U.S. by 2021

Most Read