The above are very good examples, Uncle Andrew. I hope you will
seriously read and understand.
I have another simpler analogy to help you, and the other
thousands dollars salaried economists who puh pah'ed govts
trillions impact to kickstart economies of the world, and
claim it is only for the 'short term':-
A block of plastic charge
(RDX-Cyclotrimethylenetrinitramine) can
easily destroy a concrete column.
But if a wharehouse filled with compacted RDX, is set
on fire, it would only burn and nothing explodes. However, if just
one fuse the size of a pencil, electronically created to set off a
high temperature mini ignition, is placed anywere near the
warehouse and ignited, the explosion would create a
crater 25m deep and any concrete building
within 100m will be flattened!
Thus, even though the trillions spent is significantly small to
the annual world's GDP, it is a powerful fuse that will ignite
world's economy and cause it to boom.
Infrasture and govt recruitment spending will create
jobs. Once people have jobs, with money spent, confidence will
return. Like a trickling effect, from the hawker selling
hotdogs to them until to the
CEO manufacturing comp chips.
( Males would understand this analogy, having served NS. For
women, perhaps tiny jabs of Botox onto the face would be
comprehensible?)
So, do not look down on Keynesian theory. It is a
powerful fuse that had serve mankind for decades, provened and
will continue to do so. It's only hoarder people like you that will
fail it.
This part is not Keynesian. Just my thoughts:-
With regards to the stock market, unfortunately, it no
longer served its noble purpose of providing funds for companies.
Mankind had over relied on it as an indicator of performance. Stock
brokers and fund managers only used it to justify their
salaries, which is nothing more than pure gambling, using any
data to convince the movements of stocks, from a simple
hurricane to war, anything at all in order to earn the
money.
As such, confidence of the real economy, where real biz and jobs
are, depends on the good performance of the stock market. Indicator
Up and people spend. Indicator Down and the people flee with the
money, hurting the real economy. It is purely a gambling spree
right now, of people playing for 'long' and others going 'short' to
take profit, with absolutely no regard to the welfare of the
company that they are so called 'investing' in.
If only more people can be educated to look at other
real indicators of company performance in the real economy,
which there are, then future fluctuations of economic
activity can be avoided.