Friday, April 1, 2011

How a Conservative "Think Tank" Crony Explains Why Government Spending Does Not Stimulate the Economy

link here to article

I posted this article (via Manan Shukla) primarily to show how organizations like the Heartland Institute which employs this crony with tax exempt contributions as an educational institute, distort information to promote the right wing agenda.

We have large federal deficits as he indicates. He attempts to blame the deficits on the mistaken use of "outdated" Keynesian theory which has been proven to be a bad idea. The Obama stimulus ran out in 2010. The 2011 deficit and most of the previous deficits were the result of the recession. During a recession tax revenues fall and some areas of government spending increase as more people qualify for government benefits. The deficits had little to do with reliance on "outdated" Keynesian ideas. A good case can be made that the deficits would have been worse if some stimulus had not been used to reduce the impact of the recession.

This intellectual whore (I thought carefully before using this word) goes on to argue that government stimulus didn't work in the Great Depression either and that Keynesian theory has been proven to be invalid. Many ordinary citizens who know little about Keynes, and the history of the Great Depression, will read articles like this and come to the conclusion that our economic problem is the result of Obama's reliance on some clown named Keynes who believes that government should intervene in a depressed economy.

No comments:

Post a Comment