http://money.cnn.com/2010/02/04/news/economy/meltzer_keynes.fortune/index.htm If Keynes were alive today, what would he think of President Obama's fiscal policies? He would roll over in his grave if he could see the things being done in his name. Keynes was opposed to large structural deficits. He thought that they chilled rather than stimulated the economy. It's true that we're stuck with large... [more]
http://money.cnn.com/2010/02/04/news/economy/meltzer_keynes.fortune/index.htm
If Keynes were alive today, what would he think of President Obama's fiscal policies?
He would roll over in his grave if he could see the things being done in his name. Keynes was opposed to large structural deficits. He thought that they chilled rather than stimulated the economy. It's true that we're stuck with large deficits now. The goal should be to reduce them, not to take on new spending that makes them worse.
Today, deficits are getting bigger and bigger with no plan to significantly lower them. Keynes understood what the current administration doesn't understand that the proper policy in a democracy recognizes that today's increase in debt must be paid in the future.
What would Keynes think of Obama's stimulus plan?
It's unbelievable that a man whose main theme was to smooth investment comes to be the proponent of redistributing income away from the people and companies who do the investing.
My advice on the stimulus plan was, don't do it. Let's look at the plan. First, a lot of the money was used to reduce the deficits of state and local governments by increasing the federal debt. It was simply money transferred from the federal government. The economic multiplier effect was zero. Second, the temporary tax cuts went to paying off credit cards and other debts, not spending that would have increased economic growth.
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