Former professor of economics and House majority leader and current chairman of FreedomWorks Dick Armey adds his attack on Keynes here. “Washington Could Use Less John Meynard Keynes and More Friedrich Hayek”
According to Nobel economist Friedrich Hayek, a contemporary of
Keynes and perhaps his greatest critic, Keynes “was guided by one
central idea . . . that general employment was always positively
correlated with the aggregate demand for consumer goods.” Keynes argued
that government should intervene in the economy to maintain aggregate
demand and full employment, with the goal of smoothing out business
cycles. During recessions, he asserted, government should borrow money
and spend it.Keynes’s thinking was a decisive departure from classical economics,
because arbitrary “macro” constructs like aggregate demand had no basis
in the microeconomic science of human action. As Hayek observed, “some
of the most orthodox disciples of Keynes appear consistently to have
thrown overboard all the traditional theory of price determination and
of distribution, all that used to be the backbone of economic theory,
and in consequence, in my opinion, to have ceased to understand any
economics.”In reality, no one spends someone else’s money better than they spend
their own. The charade of the current stimulus package, chockablock
with earmarks to favored pet constituencies and virtually devoid of
national policy considerations, is the logical consequence of
Keynesianism in action. It is about politics and power, not sound
economics, and I believe that the American people will reject it.
