It takes another kind of crisis, specifically the earthquake and tsunami that devastated the northeastern coast of Japan last week, to expose the Keynesian fallacy that the government can spend its way to prosperity.
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“If, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, ‘Stop there! your theory is confined to that which is seen; it takes no account of that which is not seen.’”
One hundred and fifty years later, Keynesians are still flying blind.