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Then read this summary in today's WSJ.
Posted by Steve Horwitz on January 28, 2009 at 08:24 AM | Permalink
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From the simplified Keynesian point of view, yes. It's not supposed to matter what the money is spent on, just as long as it's spent... and the multiplier will do the rest.
Dave Prychitko |
January 28, 2009 at 08:41 AM
Yes Dave, JMK himself argued in the original that we could build pyramids or even dig pot-holes and fill them back up, and we would be ok provided the money got in the hands of the "right" people --- i.e., those with the highest propensity to consume.
But I think what Steve is highlighting is how this is all really a pork-fest of public spending. It is pet project time, not government investment to stimulate aggregate demand to reach full employment levels of output.
Everything about Keynesian policy rhetoric is just a front for "real politics" and interest group manipulation by either side of the political spectrum.
Mises's "Clash of Group Interests" explains what is going on and the consequences of it; and Buchanan and Wagner's Democracy in Deficit explains the connection to Keynesian inspired public policy.
It is an orgy of public spending, started by a Republican President who many loved to hate, and to be continued by a Democratic President many are prepared to love unconditionally.
Both are just doing what democratic politicians do --- concentrate benefits and disperse costs, and so doing break the "generality norm" which would be the only rule in politics that would ensure the politics was appropriate restrained (see Buchanan and Congelton's Politics By Principle, Not Interest).
We are a long struggle ahead of us to dig out from underneath the ideological confusion and policy mess that the US is currently creating.
Peter Boettke |
January 28, 2009 at 11:56 AM
Oh, I also agree it's an orgy of public spending, and I find it detestable! It is repulsive and the long run results will be deadening.
Dave Prychitko |
January 28, 2009 at 02:37 PM
Seems like President Obama did not tell the truth to his audience at GMU on Thursday, January 8th. Here is a clip from that speech...
"We have to make tough choices and smart investments today so that as the economy recovers, the deficit starts to come down. We cannot have a solid recovery if our people and our businesses don't have confidence that we're getting our fiscal house in order. That's why our goal is not to create a slew of new government programs, but a foundation for long-term economic growth.
"That also means an economic recovery plan that is free from earmarks and pet projects. I understand that every member of Congress has ideas on how to spend money. Many of these projects are worthy, and benefit local communities. But this emergency legislation must not be the vehicle for those aspirations. This must be a time when leaders in both parties put the urgent needs of our nation above our own narrow interests."
Doug Thorson |
January 28, 2009 at 06:41 PM
Beautiful Doug. I'm gonna make a new post out of that.
Steve Horwitz |
January 28, 2009 at 07:21 PM
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