There are many mainstream economic myths perpetrated daily from politicians, economists and press. Theses myths include more government spending and lower taxes stimulate growth. Higher tax rates reduce growth. Almost everyone believes that infrastructure spending has a high multiplier. Economists are actually proposing that inflation by the Phillips curve creates demand thus jobs. When myths are repeated often enough we begin to believe them just as this did in OZ. This paper gets us back to the reality of Kansas. Kansas is not always great with it's cyclones and hard work but it is reality. This paper destroys the easy way out of economic myths of the left and right. Trend carefully before you read Dorothy might be throwing a bucket of water your way. Before you read the paper below first watch this funny Econ Follies video about the myths of consumption.
More Myths By Other Authors
Another economic myth has been busted. It is ironic that Liberals make light of trickle down economics but they join their dove friends at the Fed (Yellen, Bernanke) in the belief that the wealth effect is effective in creating demand thus creating jobs. The wealth effect and trickle down economics are the same. Click here is read a report by Van R. Hoisington and Lacy H. Hunt, Ph.D. They show in detail how there is a correlation of only .27 to purchasing to the rise in the S&P.