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The Keynesians were never wrong. The issue is that the rich countries, especially the US, have never followed a Keynesian policy of minimal to no deficit durin
by JPKab 14y ago
The Keynesians were never wrong. The issue is that the rich countries, especially the US, have never followed a Keynesian policy of minimal to no deficit during periods of private sector growth, They only follow Keynesian philosophy when they are in recession and they want to run high deficits then. Rather than acknowledge this, the austerity people scream out that Keynes is flawed, when in reality its the democratic tendency towards giving people low taxes and lots of services that is the problem.
- dageshi 14y agoYeah which pretty much make Keynesian policy useless since it can't be implemented within a democracy.
- JPKab 14y agoIt can if you have a balanced budget mechanism which allows tax cuts only if they are paid for, based on a broad-spectrum analysis of GDP growth rate. Not one study, but a Nate Silver like approach to measuring GDP.
- dageshi 14y agoWhich no politician is going to vote for because it curtails their ability to be re-elected.
- fulafel 14y agoIn the US under Clinton, the budget had surplus and government debt was reduced. See eg. http://www.factcheck.org/2008/02/the-budget-and-deficit-under-clinton/ http://www.factcheck.org/2008/02/the-budget-and-deficit-unde... Same has routinely happened in many places in times of growth, eg. in northern Europe.
- lolcraft 14y agoYeah, but this was during the 90s, a period of growth caused by IT and finance developments. That budget surplus was a result of high economic growth, not a cause. Which, incidentally, is what the data that R/R distorted so much supports: that low growth causes high public debt, not the reverse.
- fulafel 14y agoErm. I think you're agreeing with me but thought I said something about the growth period's cause? I was providing a counterexample to his claim that "rich countries, especially the US, have never followed a Keynesian policy of minimal to no deficit during periods of private sector growth".