The fundemental flaw is that human labor should never be wasted.
Key word is human. as we automate and increase the average persons productivity we no longer require so much production per person so workers go idle.
No single person or group can permanently delay the inevitable shift to a resource based society. Right now the government spwaned an entire artificial industry catering to products that nobody wants or needs to help spur human employment.
The pace of automation is FAR outpacing the governments ability to artificially create demand and within the next 5 years most business will be automated.
The real question is what do we do with all the unemployed people... how do we increase consumption of those with no income?
#1 is the ONLY option because we already have an overabundance of production... at least in first world countries.
Tools of war are not always obvious. The worst weapon is an idea planted in the mind of man. Prejudices can kill, suspicion can destroy, and a thoughtless, frightened search for a scapegoat has an everlasting fallout all of its own.