Foyle
"Pyramid-building, earthquakes, even wars may serve to increase wealth, if the education of our statesmen on the principles of the classical economics stands in the way of anything better."

In other words, Keynes was saying that, if politicians education in classical economics - that we can’t increase real wealth by inflation and spending - stands in the way of their approving public funding for loss-making projects, then pyramid-building, earthquakes or wars may serve to increase wealth [i.e. by creating ‘jobs']. In other words, government funding of blatantly wasteful or destructive processes serves to increase wealth. That’s what Keynes is saying. And the tree is known by its fruit.

"Thus we are so sensible, have schooled ourselves to so close a semblance of prudent financiers, taking careful thought before we add to the 'financial' burdens of posterity by building them houses to live in, that we have no such easy escape from the sufferings of unemployment. We have to accept them [ie adding to the financial burdens of posterity, i.e. public debt] as an inevitable result of applying to the conduct of the State the maxims which are best calculated to 'enrich' an individual by enabling him to pile up claims to enjoyment which he does not intend to exercise at any definite time".

In other words, what savings does for the individual (enabling him to pile up claims to enjoyment which he does not intend to exercise at any definite time), debt and spending on loss-making activity do for the State (an ‘inevitable result of applying to the conduct of the State the maxims which are best calculated to enrich an individual’).

Those quotes only confirm what I said about Keynes. He preaches that by by spending on loss-making activity, funded if necessary by debt and credit expansion, we can generate real wealth for society.

It’s literally like thinking that smashing windows creates wealth because of the ‘jobs’ it creates for glaziers.

While ever policy is dominated by this profound confusion of thought, people will endlessly fall for snake-oil by the pork-barrel load.

Peter Hume,
You really do not understand when a writer is being ironic.
Keynes is making the case that we should add to the real infrastructure wealth of the community when ever unemployment rises in the private economy.
He is also stating that often governments adopt less desirable actions in such circumstances and that it is the shortcomings of their education and knowledge, and their attempts to mimic the beliefs of business leaders, that gives rise to this problem. He actually used the concept of a duplicated and unnecessary railway when better public housing would be preferable. In the GFC Rudd and Co went for things which could be done quickly. Even the money wasted on overpriced school building ended up as secondary stimulus except that someone probably spent money on a Beemer rather than the kids having better or more facilites for the money.
I would post the whole of the appropriate chapter except that it is too long.
I have my own well thumbed copy of the General Theory. What you have said is almost the complete antithesis of Keynes' intent.

John,you are a voice crying in a wilderness of complacency.

Complacency has its own reward - a very nasty and rude awakening.
Between 80 and 90% of Australians recently voted for the two major parties,neither of which has the faintest clue about where Australia is headed let alone how to steer it in the right direction.

The corollary is that a substantial majority of Australians don't have a clue either - not a good outlook.

“Keynes is making the case that we should add to the real infrastructure wealth of the community when ever unemployment rises in the private economy.

Even so, the necessary implication is that stimulus policies are not wasteful, notwithstanding that they are loss-making projects, because they ‘add to the real infrastructure wealth of the community’.

The question then becomes how does one distinguish between government-funded works that are common-or-garden loss-making projects (pink batts, BER), and those that add to the real infrastructure wealth of the community?

You assume the distinction by such terms as ‘less desirable actions’, ‘duplicated and unnecessary’, ‘better’, ‘things which could be done quickly’, ‘money wasted’, ‘overpriced’, ‘better and more facilities’.

These terms assume what is in issue. If the criterion of investment is not to be profit and loss, how could it be anything other than the arbitrary say-so of the government?

If government spending is to be at a net loss, we are back to the original fallacy of believing that loss-making and waste add to the real wealth of the community.

But if government spending is to be at a profit, the implication is that the total net social benefit of this spending is greater than the total net social benefit if government had not confiscated the funds from private owners in the first place. If this assumption was available, then an assumption of the viability of full socialism would be available. Where is the cut-off point? (And it can't depend on government's assessment of its own beneficence.)

I believe that Keynes intended a short-term solution. He knew his policies were not viable in the long run. He intended, once they ran their course, to correct them with some further intervention. But by that time he was dead.

Government spending and debt on loss-making projects as a way to prosperity is Keynes’ thesis, not his antithesis.

I think that my earlier posts have shown that I believe we should hang onto our non-renewable assets, and I don't believe that anybody has put up an arguement to prove otherwise. Certainly we are probably losing other valuable assets, some of our doctors, scientists, Engineers etc, and of course those screen stars. Our earlier tax system of the 1950-1970, was invaluable for our wage earners, but did not give them the same wealth as the tax system does now for the wealthy, I think Wayne may have woken up a bit, but it is unlikely. We have got to the stage of CEO's taking up to $42,000,000, but our wage earners are getting to the stage of losing their jobs, their bank balance and their homes, some have, and they with their families destined for the street. You can't have both obscene excessive salaries and other incomes, and have good living conditions for our workers with a good economy, at the same time. What do you want, see high salaries and families kicked out into the street, or a lot of millionaires and multi-millionaires, and have a recession or depression. The choice is yours, you can't have both. The successful high top tax, or a dangerous low top tax.

Peter Hume
Your argument overlooks the fact that in economic productivity terms all unemployment benefits are complete waste. The benefits allow people to survive but they add nothing to the infrastructure.
A stimulus package aimed at constructing school facilities or insulating homes does add to the infrastructure assets of the community.
Something like a new Snowy Scheme would have been preferable but such projects are never shovel ready and by the time such projects were up and running we would have been in a deep unemployment hole.
The Rudd government rightly believed that something had to be done quickly and in haste some errors are bound to occur.
The errors in the roof insulation were mainly state supervision problems and in the schools buildings projects the errors were largely the fault of the pigs at the trough, either/or/and bureaucrats and contractors, depending on which state.
Keynes stimulus idea was basically that it is more sensible for Governments to be ready to take up any unemployment slack than to stand on the sidelines wringing their hands while raising tax money or going into debt to pay benefits for no real lasting return to the economy.