Deeper in debt, according to my sixteen tons essay. A very brief except:
The historical record does not clearly support the Keynesian view. There are many instances in which fiscal expansions did not produce economic expansions and in which fiscal contractions did not produce economic contractions.
How-come Keynesian economics are still so widely used if the data shows it is ineffective, or at least does not outweigh the costs?
Because it appeals to legislators as a way to pass out additional “goodies” and to economists who want the government to do more without having to find additional revenues.
Intentions speak louder than results, especially in the political arena.
Not that I don’t agree, but the effectiveness of a balanced budget amendment appears, in the current political climate, to be somewhat dubious considering Congress doesn’t even bother to pass budgets, anymore.
@Jotto: …because it serves as an excuse and foundation for amassing political power via the disposition of self-interested money through government largesse.
It’s that simple.
Arnold, I agree with your conclusions regarding the Keynesian history in the United States. However, I kept waiting to read in your “16 tons” essay about what I consider to be true underlying failure of government deficit demand spending to contract in times of economic recovery! You never mentioned that enormous hesitancy among politicians to contract Keynesian employment stimulus when the crises pass. These elected politicians have never, since the Kennedy heyday of Keynesian spending, been amenable to firing government workers, once hired. And since, conveniently, Keynesianism renders deficits “okay,” the politicians simply keep spending, so as to keep their voting “employers” happy. You’re the expert–tell me if I’m wrong.
Arnold, well said, and a timely point to raise.
As I like to say, we are running out of emergencies. There is no war. There is no (temporary) economic crisis. There is no disease outbreak. There is no environment crisis.
It’s time to act like adults and spend within our means.