Keynes Versus Hayec

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There is a popular rap treatment of the Keynes versus Hayec debate that obscures the issues on what to do during a recession. Hayec turns the issue into one of central planning. He has no answer for the question on what to do in a recession. Keynes was not a central planner either. He realized that the economy could settle into a deep recession with high unemployment, and that the government could take actions to reduce the curse of unemployment, and maintain the market economy that was threatened by high unemployment.

Conservatives today still use the Hayec trick to their advantage. When democrats are in office they portray government actions to stimulate the economy as central planning or socialism. Government under a GOP administration operates much like governments under democrats but it was not called socialism when Bush added the drug benefit to Medicare, just prior to the 2004 election, and it was strongly supported by the GOP.