We are seeing the end game played out over and over in different cultures all over the world. There is one thread of similarity. All of them have practiced Keynesian economics for decades. The belief that more government spending and bigger government to solve society ills has degenerated into a stagnant economy with no growth and in many parts of the world it’s unsafe to walk down the street.
Riots have taken place in “civilized” first world countries. Spain, Italy, Greece, even France and England. Unemployment in some of them is over 20%, and for younger people that have never been hired it can be significantly higher. Even in America, we have seen mini-riots with the Occupy Wall Street crowd and in places like Wisconsin and Ohio that have tried to undo years of bad economic policy. The Arab spring was caused more by economics than it was anything else. An educated populace had no place to work, and no underlying economy to create jobs.
If you don’t understand the technical differences between the Keynesians and the Classical economic principles, you surely have heard iconic words and seen them practiced. You just didn’t realize it. “Prime the pump”, “government stimulus”, “government investment” are typical phrases used to easily translate Keynesian policies. This is just government allocating its resources to different projects. Governments cannot invest. They are not bound by the same constraints as private business.
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