The mainstream economic model is based on the premise that boosting the demand for goods and services will stimulate economic activity. Central banks, including our Fed, have been pumping massive amounts of money into the economy, but the economy is not getting better. Mainstream economic professors are finding it difficult to explain why the economy has not positively responded to the stimulus. The answer is simple -- that model doesn't work.
A growing economy requires increasing wealth through an accumulation of capital, the equipment and facilities that are used to produce goods and services. This capital represents real investment, as opposed to the political rhetorical government investments into education and other social programs.
Some economic activity creates a nation's wealth and other economic activity destroys a nation's wealth. Wealth is created when a successful business earns a profit and increases its sales and revenues. The additional capital required to expand operations is a wealth-generating activity.
Other economic activities, especially wealth transfer programs, take money away from wealth-generating activity and redistribute it to non-wealth-generating activity (social programs, unfunded government retirements, federal subsidized health care, etc.) and destroy national wealth.
The Keynesian idea that government spending is the best way to grow an economy is incorrect. It looks good when the magnitude of wealth-generating activities exceeds the magnitude of non-wealth-generating activities. That situation existed in our economy until wealth generators became overly burdened by federal regulations (EPA, Sarbanes-Oxley, the PATRIOT Act, Dodd-Frank, Obamacare, etc.) they were forced to divert scarce money away from wealth-generating activity to fund their compliance with laws and regulations.
This economic slowdown was exacerbated by a concurrent increase in non-wealth-generating activity such as increased spending for unemployment benefits, SNAP, education grants, and many other social spending programs. The net result is that the forces of wealth destruction are currently greater than the forces of wealth generation. Our economy is shrinking rather than growing.
We need to elect representatives who will decrease non-wealth-generating activity and remove the regulations that hamstring our entrepreneurs so they can resume the wealth-generating activities that will increase or national wealth.