Reply #24: He's Completely Correct [View All]

[ProfessorGAC]

There are elements are Keynesian economics that are very sound and very efffective. This is the most critical one.

A deep recession would cause revenue declines, inflation (therefore raising expenses) which result in deficits anyway.

So, the goal is to find a way to use those deficit funds in a the most direct way possible to revive the economy.

Keynsian elements work as long as the deficit spending is done for a specific purpose in times of emergency. The trick, of course, is defining "emergency". In this case, the struggling economy seems an appropriate one. Iraq, for instance, failed to meet any reasonable definition.

So, i think his idea is fine in the short term, and since he's using the 2 year horizon, that seems short term to me.
The Professor