Keynesian economics appears to be all about economic stimulation, quantitative easing. I am aware that quantitative easing contributes towards inflation and how that works. If the government instead of quantitative easing sent everyone money. I have read that this would contribute towards inflation in much the same way as quantitative easing. But do you think that if the government gave the tax payers two months off taxes per year that it could lead to price increases that would look like inflation?
As stimulating the economy via government appears to be a major aspect of Keynesian economics, why do they over look tax breaks as a form of economic stimulation?
If new money was printed and sent to everyone, then price inflation would be created. In the second scenario, the government wouldn’t “give” anything to anyone. It simply wouldn’t take a part of what it normally takes (and spends). This would only change who controls (consumes, invests) that part, hence affecting different sets of prices in the economy.
They don’t overlook them. They simply claim that government would control (spend, invest) the money in question (the tax break) in ways that are deliberately designed to be more “stimulating” to the economy than their rightful owners would. By that logic, thiefs should be encouraged to break into “hoarders” homes, take the loot, and spend it, in order to “stimulate” the economy for the benefit of all.