NPR has an article about Keynes and spending our way out of a depression.
One point about Keynes theory that if I remember correctly goes something like spend in bad times cut back in good times. Keynes is overused much like prescription antibiotics.
Prescribing Keynesianism to some politicians is like prescribing crack to a coke addict. In the 1970s, the patient hit rock bottom. The U.S. had high unemployment, and the Keynesian solution stopped working. The national government spent and spent, but unemployment only got worse. Then came inflation, something Keynesians had no answer for.
The problem is we have been borrowing and spending like crazy both publicly and privately. We've had the accelerator pushed to the floor, how do we go faster now?
Keynes (again as I remember) recommended these fixes for short term problems. Our problem is systematic over spending. Obama et al. are prescribing aspirin because they believe the patient has a hangover, when the country really needs chemotherapy for debt cancer.
The bad debt that has accumulated needs to be accounted for, losses have to be taken, companies need to go into bankruptcy (which is often reorganization, not necessarily going out of business.)
We can't "cheat" our way out of this with Keynes.
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