When the Great Depression hit, the best humanitarian minds went to work on it.

Names that spring to mind are J M Keynes, FDR and J K Galbraith.

Problem is that they were too successful, so then complacency and greed set in ... giving rise to such as Milton Freidman and "monetary policy" generally.

Keynes espoused "fiscal policy" and it is really very simple ... with a good analogy being the LSE pump model of an economy.

Obviously some form of money is necessary to enable the flow of goods and services, so some central authority must supply sufficient liquidity.

There must be sufficient currency in circulation to keep things going, but there must also be a way to take it back and "top up" the tank.

That's where fiscal policy comes in in many ways.

Obviously (I would have thought) you cannot keep on just printing ever-more dollars, pounds and whatever ... because people will go silly with having too much money.

Taxes reduce liquidity ... stop people being silly.

Fiscal policy is all about taxes, stopping people being silly and far more.

Money (no matter what form it takes) is both the medium of exchange and a store of wealth.

There are good and bad years.

During good years a surplus is built in both actual goods and the money which represents them, so it makes perfect sense to put something aside for the inevitible bad years to follow.

Simple:

You tax and save surplus money for a rainy day

What is the problem with that?

Well I'll tell you what the problem is.

The general Keynes/FDR/Galbraith solution was SO successful (e.g. the Marshall Plan) that people got complacent and greedy.

By around 1970 people generally were so well off that they no longer bothered about fundamentals and were primed to accept the doctrines of Milton Friedman and Ayn Rand.

"Greed is good." "Taxation and regulation are bad."

Monetarism became the religion of the day and so it remains.

Every man and his dog barks the nonsense that "interest rates" are the way to manage an economy, "Oh, my dear, is the Fed going to adjust interest rates soon?"

I see it all the while and it is utter nonsense ... utterly short sighted.

I'll tell you what this reliance on interest rates does.

Sure it does "regulate the economy" and can take the "heat" out of too much of everything.

The 17%+ interest rates of the 1980s sure put a dampener on things, but they did nothing to "put money away for a rainy day".

Whereas any responsible government would tax, e.g. so as to ensure retirement incomes and health policies, an irresponsible government hands it all over to the monetarists.

What interest on money lent does is transfer money from the poor to the already wealthy.

Some people are bewildered about why the "middle class" is disappearing (never mind the really impoverished).

Simple!

It is because of monetary policy and all that goes with it, e.g. deregulation.

If you have not read Keynes and Galbraith, then it is probably better that you don't comment on what I have written.