You might have missed this, but with the recent increase of the Federal government "debt ceiling", our government's borrowing now exceeds our nation's GDP. That's right, our government is now in a hole deeper than the value of all the goods and services the U.S. economy produces in a full year.
The last time our debt was more than GDP?
The late 1940s. Recovery happened swiftly then, which should give us hope. There is a way out.
But remember: It was not World War II that brought us out of the Great Depression, the end of the war did.
And remember further: Most of the big names in economics -- by then, Keynesians all -- had predicted a huge economicdownturn as government spending plummeted and wartime regulations (chiefly wage and price controls) hit the dustbin.
It was a very bad prediction, because the economy soon took off.
Why? Less government spending, less regulation, far less involvement in the economy.
In short. More freedom.
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"In old fashioned language, Keynes proposed cheating the workers." -- Ludwig von Mises
ReplyDeleteLvM's statement would seem to put at odds Keynes and Marx while contemporary policy is demonstrating Neo-Marxists and Neo-Keynesians to be two peas (npi) in a pod.