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0 pointstomjen312y ago0 comments

No we have not fogotten him. We should, though because he was wrong. Stimulus doesn't work.

0 comments

Except he was right and austerity works even less.

Except he was wrong and well managed austerity does work. When it's actually employed. Cutting government 1%, or holding spending the same, is not austerity.

The ideas of Keynes are responsible for the last decade of economic disaster around the planet.

Austerity has been proven to work over and over again.

Just ask Sweden, they're a proof case that managed austerity works exceptionally well.

http://www.bloomberg.com/news/2012-06-06/booming-sweden-s-fr...

Or ask Latvia, a recent case of successful austerity.

http://www.nytimes.com/2013/01/02/world/europe/used-to-hards...

http://www.cnbc.com/id/100558455

However, Latvia employed REAL austerity. They cut deep. Not the slow motion - we don't really want to cut anything - train wreck that people like Krugman are claiming is austerity (see: Greece or Spain).

Over the last 30 years China has radically reduced its public to private spending ratio. It has been one long managed austerity process. No surprise it has boomed accordingly as private capital was left free to be invested to actually grow the economy, which is not something consumption based Keynesian policies can accomplish.

Most government spending doesn't create wealth, sustainable jobs, and it doesn't produce anything. It's consumption paid for by production. The more you tip the balance toward government consumption, the more disastrous the consequences. Greece, Italy, France, the US, Portugal, Spain, Japan, Britain, etc. are all obvious examples of following Keynes policies the last few decades. It has led to destruction.

mseebach12y ago

The thing about Keynesisnm that everybody conveniently forget is that you need to cut spending and tighten up during boom-years, so you have a lean, effective economy that might actually respond to stimulus spending when the bust comes around.

gamblor95612y ago

I take your "facts" with a heaping pile of salt, considering that Sweden has one of the highest tax rates in the Western world, Latvia's economy is smaller than most U.S. states and is smaller than the economies of NY, LA, Chicago, or Atlanta, and China's government has spent more in the past decade to rev up its economy and keep it going than the rest of the world combined. China spent billions on the Olympic facilities alone, not including the hundreds of billions they spent on other infrastructure projects of the past decade, or the subsidized loans to factories, farms, bio-tech companies, and real estate developers that would generally be considered illegal under various WTO pacts and accords if China was considered a 1st-world nation. (Most major Chinese corporations are government-owned; in some industries, all of the major Chinese corporations are government-owned.) China's recent (within the past 6 months) reduction in government spending has virtually killed it's construction and real estate sectors, and it has a huge debt bubble which is on the verge of collapsing.

megablast12y ago

I am guessing well managed stimulus would work. This is the no real scotsman problem.

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