Crime Against Humanity: Pensée Unique in Economics, 26
The government applied the neoclassical doctrine and tried to stimulate the economy through increased public spending. To get the needed money, devoid of the carefully concealed basic of monetary sovereignty, and while the weaker economy further reduced tax revenues, the government couldn’t help sinking the State into increasingly greater debt. And it did not work. Record−sized public spending failed to lift Japan’s economy out of recession. It even seemed to have a negative impact on private demand.
The central bank applied the neoclassical doctrine and tried to stimulate the economy through interest rate reductions. To the usurpers of monetary sovereignty any interest on what they create out of nothing in their own pockets, be it positive, zero, or negative too, is immaterial, and indeed they reduced interest rates down to zero. And it did not work. That too failed to trigger a significant economic recovery.
Interestingly enough, Werner’s data show us how the cause−effect relationship between interest rates and growth in the real world, if ever there is one, is the exact opposite of neoclassical claims: neoclassical economists say that interest rates are cause and growth is effect, and therefore use interest rates to stimulate economy; real world data document how growth is cause and interest rates are, if ever, effect, and therefore how it cannot be at the same time the other way around, too.
To these failures the countermoves of the supporters of neoclassical mainstream were two, typical and fraudulent: “claiming not enough”, and “lowering the bar”.
As to “claiming not enough”, the swindle consists of claiming that the cure is not working because its amount is insufficient, and thus advocating that the “cure” is even increased. The neoclassical cure for Japan was so “insufficient” that the unprecedented “stimulation” doubled−to−tripled the outstanding public debt over Gross Domestic Product on the one hand, and on the other hand it reduced the interest rates down to zero. The typical fraudulent mechanism here is passing off the cause of the disease as its cure: as long as the victim can be made to buy it, the suppressive criminal can say that the cure is not working because its amount is still insufficient and has to be increased, thus increasing the suppression, and the whole point is: what will the victim do first, wake up or die?
