The Powder Keg in Our Future

"Where does the government get the money to spend into the economy in order to compensate for the refusal of consumers to spend money?" When you ask this question, you become alert to the two possible answers: the government either taxes the money that would have been spent by consumers, or else it borrows the money that would have been invested by investors. In other words, the policy of deficit spending does not change the fundamental spending patterns of the society; it just shifts money from one group of investors to another. This should be obvious to anybody with even a minimal understanding of economics, but it is not understood by the vast majority of those scholars with Ph.D.'s in economics.

We are sitting on a powder keg and, if commercial banks light the fuse, the results will be disastrous says Dr. North. He challenges the premises of Keynesian economics and it its practitioners in the administration and at the Fed.