It has been reported in a number of outlets that President Obama’s “American Jobs Act,” to be proposed in his speech tonight, will have a price tag of about $400 billion. (See this clip from Fox and Friends this morning for a fun exchange.) But then everyone of these reports goes on to quote Obama’s press secretary Jay (the carnival barker) Carney that “everything the president proposes tonight will be paid for.” But of course the whole idea behind Keynesian stimulus policy, for good or for ill, is that it is paid for with borrowed money. According to classic Keynesian policy the biggest bang for the buck, i.e., the largest so called multiplier effect, comes from increased deficit spending. If all the spending is “paid for” the purpose is defeated.