Providing increased or government-"stimulated" spending power to consumers may have some temporary advantages, and may provide some early visible results (see Hazlitt's "What is seen, and what is unseen", Economics in One Lesson), but the question must be asked, "Where will this increased spending power come from?"

The answer will most often be, "The government should provide this money out of its tax revenues" - or alternately, "government should require that money be spent by private businesses and individuals on certain things, so as to increase economic activity".

One of the political euphimisms to appear in recent years is the idea of government using tax revenues to "invest" in the economy or in the markets.  This assertion is total distortion of reality.

It will be clearly seen upon examination that since government simply removes money from the market in the form of taxes, it can add nothing when it simply puts that money back into the market.

To illustrate, for men and women in government to take $100 from "A" to give to "B" will certainly benefit "B", but only to the same extent that it hurt "A".

The transfer of wealth was not voluntary on the part of "A", and he did not benefit in any way from it - at least not enough for him to have voluntarily made that transaction in the first place.

As far as the total amount of spendable income and wealth is concerned, the economy is no further along than when it began, and "A" has suffered an encroachment of his property.  This does not advance human well-being.

The Keynesian approach to stimulating the allocation cycle almost totally ignores or discounts the real dynamics of the market.

By now it should be clear that the growth and development of an economy (and the advancement of human well-being) is dependent upon the willingness of individuals to invest.

Our lives and well-being depend upon the production of goods and services, and we cn only have as high a standard of living as our level of investment will provide.

If we want to maximize our human well-being therefore, we must always be aware of and minimize or eliminate those factors which will discourage and inhibit the process from whence this progress comes.

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