Government Stimulus: Does Corruption Ever Enter Into the Economic Formula?

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Predictably, The Market continues to be influenced by politics, rather than economic fundamentals, and the new political debate du jour to grip Wall Street is the potential need for more government stimulus.

Government stimulus, in theory, has the potential to ease economic pain. However, the trouble is that economists, ever so adamant about designing rational policies around numbers, fail to incorporate fraud and corruption into their neat formulas.

Keynesian economics can work in an ideal world where people act ethically, however, unfortunately the reality in the US, and most profit-driven societies, is the complete opposite. So what happens when the government prints money to save banks or to prop up the production economy, is simply that the money mysteriously disappears or winds up as large bonuses. As such, all economic policies, like stimulus plans, based upon some version “trickle down economics” remain a myth and are doomed to fail.

I have, of course, no solution to this problem since our entire society is sadly built around the love of money and the acquisition thereof. The overwhelming greed and rat race, by nature, forces otherwise ethical people, into dubious pursuits.