Reply #3: What I don't think people are seeing is that this isn't anywhere near

[jtuck004]

what Keynes imagined.

What he saw was people creating and buying and selling. Within a reasonably limited geographic area, except for a few commodities and some food that traded world wide, people would create too much, then sales would drop off, then they would pick up, new inventions would change things, and the whole thing turned into a cycle of up and down. His theories came to prominence after the monopolies and banks of the 1900's to the end of the 30's or so nearly destroyed the equilibrium that the economy had created. They had taken only slightly more of the wealth of the economy for themselves than the top 2% have taken today, and that imbalance just imploded the whole system.

But our investment banks took that to a whole new level. The guess is that, hidden behind the regulations and with the help of the Federal Reserve, they had created a leveraged system of around $140 trillion. The GDP of our country is around $14 trillion. So these people created a leveraged debt of 10 FREAKIN TIMES our productive output. Millions of jobs and homes as well as hundreds of thousands of businesses depended on the existence of that debt, tied up in pension funds, international investment pools, our financial system, our lives. Then it cratered.

Keynes work said we should plan for the bad times by setting something aside for the times when the business cycle would reach its bottom.

He really didn't address a reckless and unregulated behavior by the investment banks and government as they moved all the wealth that we could create for the next deacade into private pockets.