Patrick Lake's July 13 letter to the editor, "Nation's too dumb to appreciate Obama," is a gross misstatement of President Obama's real intentions. Obama makes statements that deceive ones like Patrick into believing he has good intentions, but his real intention is to follow the eight-step plan expressed by Saul Alinsky in his book "Rules for Radicals." Obama is well-schooled in these steps to transform America into a socialist state:

First is government controlled health care and second is poverty. The influx of illegals continues to his delight knowing it will help increase poverty and allow people control. Third is to increase debt to an unsustainable level. Fourth is gun control. Remove guns and create a policed state.

Fifth is welfare, government control of food, housing and income, also a U.N. desire supported by Obama. Sixth is education control, what we read, view and listen to. Shut down all opposition sources. Seventh is to remove the belief in God from government and schools, loss religious freedom. Eighth is class warfare. Divide the people into wealthy and poor (tax the wealthy to support the poor).

The title should have been, "A nation too dumb to understand Obama's deception and real agenda." Wake up America.

Terry L. Davis,

Berea

Keynesian economics is centered on spending. He authored the circular flow model to explain that spending, not saving is the key to economic growth. Keynes preferred government investment in public works projects such as the New Deal. He realized that a heavy investment in infrastructure would create jobs. Other than the primary benefit of the jobs that the new deal created, he thought that there were secondary benefits to the economy as well. He preferred this method because he believed in the multiplier effect. Keynes formula for the multiplier effect is based on the marginal propensity to consume (MPC). The MPC is the amount of increased income that is spent on goods and services. For Example, if I get a raise of $100 a month and spend $70 of it, the MPC is .70. This $70 is spent and therefore it becomes income for the people that receive it in exchange for the sale of a good or service. This increase in income creates a chain as the people that received the initial 70$ spend .70(49$) and therefore it multiplies the effect of my initial $100 raise. Keynes argued that saving would inhibit the multiplier effect and therefore the more income you spend, the better the economy is for everyone.

Under this assumption, Keynes favored government spending on major projects because the government would spend one-hundred percent of its budget on the project. This led to an inefficient use of taxpayer dollars. If infrastructure projects were privately undertaken, the thriftiness of the entrepreneur would lead to a more efficient use of labor and resources. It is the motivation to save money and maximize profits that keeps things efficient. Free of bloated bureaucratic spending, privatization is almost universally more efficient than public works projects.

Keynes believed in the abolishment of the gold standard in favor of a fiat currency. This enables governments to print more money and artificially stimulate the economy. Generally, an increase in the money supply causes inflation. Inflation decreases the purchasing power of the country’s currency, leading to unstable markets and a higher cost of living. This higher cost of living can lead to an inflationary spiral. According to the online website Business Dictionary, an inflationary spiral is when “high cost living prompts demands for higher wages which push production cost up forcing firms to increase prices, which in turn trigger calls for fresh wage increases.” Without intervention, this cycle can break a countries economy and make its currency utterly worthless.

That is an exerpt from a macro paper I wrote sophomore year. My tenured econ professor gave me an A. Keynesian economics has been the rule since the new deal. The Chicago school econmists have not had enought of an effect. Read "The Road to Serfdom" by FA Hayak.