Europe Is Turning Its Back on Keynes’s Cure for Recession

10-20-2010 • NY Times

The British economist John Maynard Keynes may live on in popular legend as the world’s most influential economist. But in much of Europe, and most acutely here in the land of his birth, his view that deficit spending by governments is crucial to avoiding a long recession has lately been willfully ignored.

1 Comments in Response to Europe Is Turning Its Back on Keynes’s Cure for Recession

Comment by Anonymous

Entered on: 10/21/2010 8:11:37 AM

Keynes actually didn't have a cure for recession. "Stimulus spending" or the Keynes solution is massive government spending when there is otherwise NOT a substantial debt over a short period of time to "shock" the economy back to life.

However, since FDR, politicians have been stimulus spending a quite healthy economy into massive debt that can never be repaid in order to buy votes for themselves in the short term.

That's why the Keynesian solution isn't working now and cannot work. The economy has been under (otherwise healthy over a very short term) Keynsian shock for close to 80 years!

There's nothing left to shock!

Now the economy has to go through a long period of detox. 20-30 years maybe?

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