Given the amount of government spending in both the US and Australian economies prior to the crises one would think Keynes had never totally went away.Leftofcentresalterego wrote:Yes Frogen, I am of the opinion that governments should do something, as is nearly every government on Earth and even notably neo-liberal institutions such as the IMF who miraculously became Keynsians when the crisis hit.
Still when the US last attempted this it was a creditor nation with hope of being able to recoup the debt, it is now a debtor nation with an economic problem largely caused by that debt using more debt to attempt to escape the problem, and not even using that debt wisely in a targeted manner.
Obama having abdicated the stimulus draft to the Democrats in Congress rather than targeting the money to the causes of the crises may be prolonging it. (Many economists argue the same about Roosevelt and the Great Depression.)
He should not be the Santa Claus of every spending cause but rather target the money on saving banking, scrubbing bad assets out and then making the institutions capable of lending again do so, restoring credit confidence and stopping dramatic unemployment rises in the short term so that markets can stabiles.
Obama has been stumbling on a banking plan, created a stimulus that shotguns money everywhere except in quick job creation which is required now.
For instance every Dem Congressman created a new infrastructure program in their district (as Congressmen do when the President signs a blank check for them) but these programs need to go through planning approval, bidding and then logistical gear up, it will be years before they create significant levels of employment, where as if Obama had actually lead, controlled the process he could have requested a massive refurbishment and repair effort on existing infrastructure which has none of the same time delays thereby directing the funds to the immediate problem.
Just throwing money out willy-nilly and crossing your fingers in not an economic plan it is religious faith.
