I have to agree with rich, in that keynesian economics success or failure depends upon your timeline. In the short run it works wonders, raising GPD and lowering unemployment and increaseing spending etc etc etc.
But Eugene, you never addressed my question in the greeenspan vs Krugman thread. How can the stimulus be pulled back without putting us into another recession? If it was a simple recession, I can understand it, but this isnt a standard recession, this is a debt crisis. How do you get out of a debt crisis by creating more debt?
Perhaps Greece isnt the right model for us, but Japan seems not too far off. They have never recovered from their massive bubbles, and they have followed stimulus measures to 200% of GPD, and have the advantage of being a export nation.
I really would like to hear the long term argument of how you get out of keynesian stimulus without going back into recessions.
