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Blog: Obama, Keynes and the GSA


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Much has been said recently about the lavish party the General Services Administration (GSA) threw for themselves in Las Vegas back in October of 2010, spending $823K of taxpayer money while the country was in the middle of an economic meltdown. For anyone not already familiar with this story, much can be found about it online.

Obama is blaming it on Bush, pointing out that the size of these parties grew substantially under the republican administration. The republicans are blaming it all on Obama, pointing out that it happened on his watch. Now, even the big spending politicians that supported all the stimulus spending over the past three years are coming out of the woodwork calling for investigations, claiming they will hold those responsible accountable. Several have already lost their jobs, and I suspect more may follow suite.

What I find most interesting about this story is that I have not found anyone pointing out the hypocrisy and contradictions involved in all this fake outrage. For years now we have heard the democrats insisting that government spending was required to help stimulate the economy, that deficit spending and debt was a good thing and would help us end the recession we are in. Even claims that unemployment and food stamps had a multiplier effect and would boost the economy. My question for all these Keynesians is very simple, how does this lavish party not fit in with your economic theory that government spending is a good thing, something we should all desire?

The way I see it, if you believe that nonsense, the president should be out defending the GSA for throwing this party, not condemning them. After all, what about all the jobs created or saved? What about the stimulus effect that it had on one of the hardest hit regions in the country? To the contrary, you should be heaping praise on this agency, maybe holding them up as a model that other agencies should learn from. If President Obama really believes that Keynes had it right, shouldn't he give a public speech, give credit to Bush for starting the stimulus before the meltdown actually happened? Look how many jobs that would have been lost had Bush not taken bold, decisive steps to stimulate the economy.

Of course, this type of argument to defend this behavior would be political suicide. All of the politicians will rush out to take the populous position, protecting the taxpayer from wasteful spending. But they will not be able to answer my question, how is the GSA spending $823K any different than congress spending $875 Billion for stimulus?

The truth is, politicians promote the Keynesian theory of economics because it allows them to treat economics like an art instead of a science. Anytime the president uses the phrase the "most economist agree", what he means to say is the Keynesians agree, ignoring the warnings from the non-Keynesians about the perils of ignoring the laws of economics. They know that if they recognize economics as a science, they would be bound to the laws of economics, which would put a stop to the endless spending.

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