[quote=livinincali]Got to love the Keynesian argument. If your stimulus efforts don’t produce the desired growth effects you can always say it would have worked if there was more stimulus. You can fail over and over increasing debt faster than GDP and claim there just needs to be more stimulus to produce growth.
I’ve yet to see one successful example of a person, corporation or country spending it’s way out of debt successfully. It always ends in a hyper inflationary money printing or a deflationary depression, but it’s different this time. Krugman’s got it all figured out.[/quote]
To be a true Keynesian you have to raise taxes and decrease spending in economic good times in order to save for a rainy day. George W. Bush’s administration failed to do so; they cut taxes and increased spending during the economic boom he presided over. Even most of Reagan’s economic team were Keynesians. That’s exactly *WHY* Saint Ronald raised taxes later in his administration.
The trouble is, what’s rational and correct is rarely politically popular. People want low taxes and high government services. So we’re often stuck with a stupid compromise where the government overspends while under taxing.
