A Binge of Non-Value-Adding Spending

Steven Kates, my favourite economist, nails it:

However you look at it, this is the core issue of Keynesian economic theory and the policy that comes with it. If it is your conclusion that increases in non-value-adding public spending can contribute to growth and employment you are a Keynesian. If that is not your conclusion, that you think it will make things worse, then you are not. There is nothing else to it. At a minimum 95% of all economists practising today accept the Keynesian premise. At a maximum there may be 5% of the profession who do not. Even with the dismal and disastrous effects of the stimulus everywhere to be seen, either the stimulus was insufficient or it saved us from far worse are the standard answers. That we are now living out the consequences of a major and fundamental error in policy is virtually stated nowhere. The debate over Keynesian economic theory has not even begun never mind having been brought to an end.

The source.

Comments

[AngelaTC]

I was talking to a liberal on Twitter a few days ago, and he told me that demand just doesn't create itself.

So there.

[Georg Thomas]

Angela, don't waste your time with liberals on Twitter, you bettter publish even more here at RSE - where your spectrum-enhancing contributions are highly appreciated.