Keynsian Economics: The Cause of Mass Unemployment in the West

In 2015, the US trade deficit is well over half a trillion
and trending upward.

In a previous post I pointed out why Keynsianism no longer provides an antidote to unemployment in the West. Instead of putting the unemployed to work, the chief effect of loose money, money printing, and government deficit spending is to pull in more imports from both the cheap labor areas of the world and the most competitive advanced economies, thereby creating a trade deficit, which is covered by the export of currency, which in turn, creates a massive foreign debt obligation.

The magnitude of the damage being inflicted on the US working classes through the inappropriate application of  Keynsian stimulus is evident from a simple calculation. A current trade deficit of around 5% of GDP equals $668 billion annually. Divide that by the average yearly income of the lowest paid half of the US workforce ($12,681) and you get 65,846,542. That's right, the US trade deficit is equal in value to 65 million times the average yearly income from employment of the lowest-paid half of the American workforce.

So that's where the missing jobs have gone: offshore. Most of the Americans who used to make shoes and shirts, car parts and computers, toys and furniture for other Americans are now among the 95 million Americans of working age who are not in the workforce. But not to worry, it's been hugely profitable for the international corporations who have exported the Western capital and technology that made possible the exploitation of Asia's teaming masses of sweatshop labor.