So writes historian Paul Johnson in this Forbes column.
Standard Keynesian thinking for nearly 80 years has been that when the country is in recession or depression, the government needs to step in and increase “effective demand” so that unemployed workers can be employed again. That’s just the Obama approach — spend, spend, spend and eventually the unemployment rate will come down.
Johnson cuts through the baloney: “One of the great modern myths taught in some university economics departments is that government treasuries can be run in a fundamentally different way from the finances of private families. This mythology includes the belief that adding to public debt is a form of investment and that spending the taxpayers’ money on a colossal scale and in a wanton manner may have positive economic virtues.”
Good article. Read the whole thing.
