I saw on somebody’s signature that Keynesian Economics is a Ponzi Scheme. I understand what a ponzi scheme is, but I do not see how it relates to Keynesian Economics. Is it referring to fiat money and the fractional reserve?
In a word, yes.
Social security is the most vivid example. I mean it is structured exactly like a pyramid (or Ponzi) scheme with one notable exception. The government takes all the money out of it and pays for other things making it insolvent even quicker than it would naturally become so. The whole Keynesian system, though, is built on the same shaky foundation. It’s consumption driven, instead of savings driven (like classical liberal or austrian systems are). Through inflation and high taxes, there are disincentives on savings and investment while an incentive is placed on consumption (through inflation, cheap credit, welfare, etc.). There is also the belief that defecit spending will help “get the wheels of industry turning again”. Supposedly, when the economy stabalizes, the defecits are supposed to be repaid through higher taxation (ironically hurting industry), but this rarely happens anyways. So basically both the government and consumers are supposed to run up defecits to encourage economic growth so the future will be better, but the process really never ends. Prosperity can only come with more defecits, borrowing, inflation, etc. Eventually this system will collapse, as all ponzi schemes do. If it were possible to consistently restrain spending in good times, it would probably be sustainable, but still not preferable.