Caroline Baum: Macroeconomics Stuck in the Dark Ages

Economists have been debating the pros and cons of fiscal stimulus since the 1930s, when John Maynard Keynes diagnosed the problem as one of inadequate private investment and prescribed public spending, financed by borrowing, as the cure.

The discussion hasn’t advanced very much in eight decades.


Agreed. I feel like an exploited machine when I hear central planners talk about this stimulus or that. Do we work for the collective just so we can pay taxes which the politicians recklessly spend anyway? How dehumanizing!!!  An economy is not a machine.  It is biological in nature because it is the result of action or inaction by human beings.  Sure, engines are part of an economy, and they are machines, but they are directed by humans.  How am I supposed to react when some dingbat politicians says we need to “kickstart” or “jumpstart” the economy.  Should I expect to be kicked or should I jump?  Is there some secret engine that gets primed and influences me to act in a certain way?


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