Thursday, December 10, 2009

Keynesian Spending Is Practical?

A recent comment asserted that free market advocates are idealogues, while Keynesian advocates are realists. I think that's crap. Both are idealogues. That's okay with me. If you don't have ideals to draw from, what is your compass? One has to solve a problem by some means, and I think for most people, their idealism becomes their realism. Certainly, it does for me. But in our goofy world, one is deemed practical when they cross their ideology.

The real outcomes are what matters. So, what of the stimulus spending? First off, let's not forget that stimulus spending is both a Bush and Obama solution. From Chris Edwards, at the Cato Institute:
In his Brookings Institution speech yesterday, President Obama called for more Keynesian-style spending stimulus for the economy, including increased investment on government projects and expanded subsidy payments to the unemployed and state governments. The package might cost $150 billion or more.

The president said that we’ve had to “spend our way out of this recession.” We’ve certainly had massive spending, but it doesn’t seemed to have helped the economy, as the 10 percent unemployment rate attests to.

It’s not just that the Obama “stimulus” package from February has apparently failed. The total Keynesian stimulus is not measured by the spending in that bill only, but by the total size of federal government deficits.

I'm struck by the chart... which I cannot seem to add right now. It's worth clicking through to.

I would argue that Keynesian economics is dogma for Democrats, (and for the liberal Republicans like Bush) but doesn't appear very practical in terms of boosting the economy. We haven't even seen the inflation yet. Look out! Perhaps it has been very practical in boosting this President's poularity, even while it did nothing for Bush. It's all very curious. In any case, maybe it's time for Obama to become truly practical by today's odd standard of the word, and start adopting some market solutions.

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