I take a very very dim view of Keynsianism prescriptions, although their analysis may be correct (sometimes).
Let's agree that we're in a demand constrained economy (I am not sure but it may be the case).
1) Why should you believe that governments are good at readjusting the economy to "unconstrain" it from demand? From Halliburton/Iraq to Solyndra to Fisker to 38Studios (https://en.wikipedia.org/wiki/38_Studios) to Telacu (http://capoliticalnews.com/2014/02/21/construction-firm-tela...), time and time again, we see governments at all levels (local to federal) reallocate funds to cronies instead of in the "interest of the public".
2) Why should we do anything to stoke demand, at all? Doesn't consumerism and the impact it has on the environment (among other aspects of society)? Why should we presume that there is a 'correct' amount of consumption that society ought to engage in? How does one measure it, and why should we be incentivising individuals to abandon what they think is right for them based on their localized information?
Your first point is a deeper problem that goes far beyond economics. We do have a government corruption problem.
As for #2, the problem is that economic demand and economic activity means doing anything at all, including fixing environmental problems.
Imagine there's no growth. Why adopt solar power then, and who's going to pay for it since there'd be no investment capital? Nope, just run those coal burners forever. No need to upgrade if there's no growth.
The deflationary road leads to the dystopia portrayed in The Hunger Games: one or two massively advanced cloistered cities for the mega-rich, and vast feudal slave classes feeding them with coal and other should-be-obsolete things.
The deflationary road leads to the dystopia portrayed in The Hunger Games: one or two massively advanced cloistered cities for the mega-rich, and vast feudal slave classes feeding them with coal and other should-be-obsolete things.
Huh? That's what the inflationary road leads to. This should be obvious, inflation skims value off the top of everyone's savings and channels it to the ultra rich (or politically connected, aka ultra rich). Almost every society in history, over the past 4000 or so years has been weakened by inflation, not deflation.
As a counterpoint, the US, which had a pretty good net deflationary run for about 150 years, had a pretty significant social equalization (freeing the slaves) over that time period.
The "deflationary spiral" hypothetical is popular idea but it is not supported by any historical evidence whatsoever (conceding that it may be true), mostly because despots have had a really hard time keeping themselves from debasing the currency over history.
Imagine there's no growth. Why adopt solar power then, and who's going to pay for it since there'd be no investment capital? Nope, just run those coal burners forever. No need to upgrade if there's no growth.
It's fallacious to argue that because there's no net growth in some economic indicator, say 'GDP', that there can't be growth in specific sectors.
Secondly, growth is not a measure of demand, especially as demand shifts. People value having clean skies, and breathable air. And there is also a obvious value in 'not having to dig in mines for your energy'. Depending on how you measure your economy (let's say we unbeknownst to us give a higher weight to miners who dig underground vs. laborers panel assembly factories in our metric), 'upgrading' to solar could incur a 'contraction' instead of 'growth'.
Let's agree that we're in a demand constrained economy (I am not sure but it may be the case).
1) Why should you believe that governments are good at readjusting the economy to "unconstrain" it from demand? From Halliburton/Iraq to Solyndra to Fisker to 38Studios (https://en.wikipedia.org/wiki/38_Studios) to Telacu (http://capoliticalnews.com/2014/02/21/construction-firm-tela...), time and time again, we see governments at all levels (local to federal) reallocate funds to cronies instead of in the "interest of the public".
2) Why should we do anything to stoke demand, at all? Doesn't consumerism and the impact it has on the environment (among other aspects of society)? Why should we presume that there is a 'correct' amount of consumption that society ought to engage in? How does one measure it, and why should we be incentivising individuals to abandon what they think is right for them based on their localized information?