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From: walsh@ihuxi.UUCP (B. Walsh)
Newsgroups: net.politics
Subject: Re: More Spread the Wealth
Message-ID: <729@ihuxi.UUCP>
Date: Fri, 9-Dec-83 09:58:35 EST
Article-I.D.: ihuxi.729
Posted: Fri Dec  9 09:58:35 1983
Date-Received: Sat, 10-Dec-83 22:34:49 EST
References: <419@pyuxa.UUCP>
Organization: AT&T Bell Labs, Naperville, Il
Lines: 12

First of all, it's Keynesian, not keansian, but that's a minor point.
Secondly, all you were describing was the 'multiplier', whereby a small
increase in planned investment or government spending (not ONLY gov't.
spending) results in a relatively large increase in GNP (NNP really).
But, if taxes were lowered at the same time and rate that gov't. spending
was lowered, the effect would not be great. NNP would remain stable, because
a decrease in taxes would indirectly increase aggregate demand, making up
for the decrease in supply of gov't. spending. So, if the gov't. lowered
defense spending, it could give us a tax cut and everything would (should)
work out fine! (Works great on paper!) Reality, alas, is never this easy.

B. Walsh