Considering the overwhelming evidence that just came from the financial crisis as to the effectiveness of Keynesian economics you're probably right. If you're still clinging to the idea that it doesn't work after all that you're basically immune to evidence.
Yes, do you even economics though? haha. You clearly don't even understand what you're arguing against.
Marginal propensity to consume is an attribute of people or a society as a whole, mostly defined by each individual's income level, not interest rates. MPC affects aggregate demand by how it acts as a multiplier on disposable income. Lower interest rates can increase disposable income through increases in asset prices or less money paid in interest, but the purpose of lower interest rates is not to alter an individual's or society's MPC, it's to alter the amount of disposable income available.
None of this changes that you said Keynesian stimulus doesn't work while then saying the problem is insufficient demand. You're basically arguing against yourself, haha. Turns out you are a Keynesian after all, but because of culture war issues you'll probably never admit it.
Nothing wrong or inaccurate about your understanding of these matters.
Marginal Propensity to Consume is a fairly elementary concept and -- I would wager -- an axiom in all economic thinking today.
Discussion of this will have a by-product to show how ideological chuckleheads, like some of the angry voters we see today, over-generalize their incomplete understanding of any "History of Ideas."
I'll try and post a graph after I write this. Imagine a "spending" or "consumption" vertical axis (Y) and an income axis (X). I believe the mathematical equivalent of the graph we seek here is similar to a declining logarithmic function, where the line moves up and to the right, and more and more to the right until it approaches a horizontal asymptote.
If the consumer-saver and income-earner were spending everything he earns, the function would simply be a straight-line diagonal at 45-degrees to either axis.
Keynes "Theory" -- which is both observable and logically obvious -- is simple. The consumer will spend less and less a percentage of total income as his income rises. What is not spent, is saved (or invested).
We've all seen exceptions, which does nothing to detract from the descriptive value of the MPC concept. For instance, some cornpone idiot out in Hicksville with earwax on his car-key wins a lottery for $100M. He then proceeds to squander it away on trinkets and nonsense, so the fortune disappears after some few years. A rational person (who uses Q-tips) would find a way to invest the wealth to return as much income as possible under various risk scenarios.
So what am I saying on a broader level? James Madison wrote Federalist Paper #10, in which he briefly describes "class struggle" in the context of resolving problems through a legislative mechanism. This was 50 years preceding Marx, and only a decade after Adam Smith's "Wealth of Nations."
There is no . . . ideological . . . monopoly . . . . on good or useful ideas, as they may be applied in a range of contexts which are more or less acceptable.
As for the Keynesian Multiplier or stimulus, that -- too -- has been proven in the real-world, for instance, with the South Korean economy and other places. But nobody would deny the stimulus effect of defense-spending in some various States of the Union during the Cold War, or no less today -- since there was never any substantive disarmament after the Cold War. Some of the conservative loudmouths, perhaps Amy Kramer and others, would simply poo-poo the idea of "stimulus" while promote greater defense spending.
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