PrintDecember 6, 2010
The Keynesian Stimulus Fallacy Refuses to Go Away
They say that doing the same thing over and over again while expecting different results is the definition of insanity. If that is the case, then Keynesian politicians are completely bonkers.
Given the disappointing nature of the recent employment numbers, as well the ongoing failure of government "stimulus" plans to spur economic growth, you'd expect sane leaders to consider changing course. Yet just recently we've seen comments from Nancy Pelosi and Sherrod Brown touting the great stimulative qualities of jobless benefits -- essentially a government subsidy of unemployment. Nor is this the first time Pelosi has made such remarks.
Now the White House is reportedly demanding yet another round of unemployment subsidies, along with a conglomeration of gimmicky tax credits which do nothing to lower marginal tax rates, before it will agree not to raise taxes in the midst of a recession. They should be more focused in providing an environment where jobs are likely to be created, rather than turning what was originally intended to be a temporary cushion into a permanent entitlement.
These leaders are in desperate need of a lesson in the fallacies of Keynesian economics, and it just so happens that one is available in the form of this recent video by the Center for Freedom and Prosperity, narrated by Hiwa Alaghebandian of the American Enterprise Institute:
