First, I wanted to make sure that you both saw my response, since I can't seem to get my point across. One of the main points of Keynes' theory was that you could stimulate an economy through stagnation and unemployment with government spending. My argument is that this only works in theory or in an environment that doesn't include high speed global trade, greed, self serving nationalism, or political manipulation.

If my example of premise security is wrong, then please show me how? You guys keep talking at me as if I'm unworthy of your wisdom, but neither of you gives me real life examples of how your theoretical presupposition works in the real world. If I'm wrong, I'm okay with that, but you have to show me more than formulas from a sealed room.

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There is no anecdotal evidence to draw from to justify these levels of fiscal stimulus, this is most certainly an experiment. The effects of FDR policies could be debated until we're blue in the fact and I think it'd be unlikely anyone would change their minds, after all this topic is still hotly debated even amongst folks much more learned than those of us here.

My point isn't to prove to you how stimulus can increase aggregate demand, after all this wasn't my argument. My hope is to get you to show me the connection between decreased transportation costs and some aspect of the general theory, I'm simply not seeing a corollary. My goal isn't to attack, it's to encourage you to add some depth to your argument.

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Okay, cool...here is my point and if I'm off base tell me where...the economic theories we are discussing were created at time when products were all manufactured and had raw materials. They were also manufactured locally. Now, many products are virtual and are thought up and production includes clicking on copy and send. This along with the fact that the time and cost to ship a product from Hong Kong to Los Angeles is now a fraction of the cost of the product when in the 30's it was almost 1/2 the cost which changes the impact of foreign trade on any demand that might be generated by stimulus spending. In the past, if you wanted to improve security then you hired guards, built fences, and installed alarms made in Indiana. Now the demand ends up not falling within our borders, but gets spread to several Asian manufacturers, so my point is that the impact is no longer the same. This is due to the change in the ability for world wide trade to function so efficiently. IMO

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As I've stated, reduced transportation costs aren't the death knell for Keynes. If anything the technological phenomena in this area coupled with the rapid increase in global AG would seem to give credence to the impact of velocity. Also I think your still clinging to a mercantilist view of foreign trade, this is going to skew your analysis on the impact of trade.

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Okay, what is Keynes saying then if he is not pointing to the need for government intervention to support demand? If the demand is increased, but it doesn't impact national employment or production - then what good was it?

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He says that and the 101 maths support it: C+I+G the only avenue to attack this is via the impact on private sector consumption, but as we know this isn't zero sum, so that relationship doesn't have to exist.

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In regards in inheritance tax.
Personally I believe income and assets are linked to the individual.
So you should be taxed on what you recieved.
Your PARENT EARNED the money YOU DID NOT, so how is taxing someone who earned their money more fair than one who has not? It smacks of aristocrasy.
Taxation on earned income should be minimised as much as possible as this is effectively a tax on work. While Taxes on Capital & Inheritance should be maximisd within a reasonable framework to allow minimisation of income & corporate taxes as these taxes help to encourage individual effort rather than sloth and indolence over generations as has happened through history.
One should be rewarded on ones own efforts not on the efforts of others or ones ancestors.

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I really don't understand your point of view here. The reality is that taxing inheritance never effects the very wealthy, because they have lawyers and accountants who hide the money and protect it in avoidance instruments. The people who are damaged are the children of the small business owner who built a modest business that is worth a few million dollars on paper, but it just squeaking out a profit. They employ 100 to 200 people and will be taxed to the point of having to liquidate the business in order to just pay the debt. This happens with farms as well.

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As one of those lawyers and accountants its not that bad. At least not in UK or Ireland, though I know enough about the US tax system to know its heavily skewed infavour of the wealthy, but the biggest problem that capital income is taxed lower rate than earned income. Over here a family business or farm can be passed on more or less tax free as long as you worked in the business full time for number of years. As your private house is ignored and are allowed up to nearly half a million tax free. So realistically their protected. So this fallacy that it'll kill small business is nonsense. Whats killing small business is tax on earnings because the capital and wealth are too low. Meaning there is not enough capital moving in the economy. We must reward the hard working small businessman and woman by reducing tax on there earned income as much as possible by covering the balance on capital and inheritance. In the long run this insures a meritocratic rather than an aristocratic society.
As I said one should rewarded for ones own efforts not those of ones ancestors or others. Only through preserving these principles can a democratic and capitalist society survive in the long run.

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"Better to die on you feet than live on your knees" - Emilio Zapata

I agree with you on giving the small business person every chance to be successful. This really isn't about taxes then. The real challenge right now is that the amount of regulation and compliance burden is drowning most small businesses. add to that the risks applied by potential Healthcare and Cap & Trade legislation, it has stymied the small business person from taking any risk. They are refusing to hire full time people and focusing on the use of contractors and temporary workers. This perpetuates the unemployment problem and reduces consumption.

The answer is for gov't to take a 2 years hiatus from any major legislation on anything and just sit quietly.

I disagree with you vehemently on the amount of pain seen by small business owners around inheritance taxation. In this country, there are 100's of hours of productivity lost to manipulating ownership in order to protect family run businesses. I really don't like the mentality that someone who has worked hard all of their life can't pass it on to their family. That is not aristocracy, that is multi generational capitalism.

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