Quote:
Originally Posted by SebC
I agree that Keynesian economics is often poorly executed, but I don't think that means we shouldn't try. Especially when fiscal conservatism carries its own problems.
Perfect example is the South Hospital (and moreso, the Foothills/Rockyview Hospital expansions). Blowing up Calgary General and selling Holy Cross was supposed to be efficient use of resources. Instead, we've had to build capacity to make up for what the "fiscal conservatives" took away.
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Not just often poorly executed, pretty much always poorly executed on a long term basis. I think it's only place is in credit collapse driven recessions, where ultimately money supply substitutes shrink and essentially cause deflation if not rectified with quantitative easing and government spending. It's best used as one tool in a toolbox of many different appraches to the economy than as an overall economic philosophy.
We just went through with one of these extraordinary events which is why everyone and their dog's declaring Chicago school economics dead and the new kaynsians the wave of the future. Not true, we're going to go through a decade of cleaning up soverign balance sheets and anemic economic growth due to the spending and easing done to avert disaster in 2008 (overall avoiding collapse probably was still well worth it). The problems will come when future recessions hit, which will be more traditional recessions casused by overproduction. The Kaynsians will only see it coming after it arrives, will release their spending on an already bottoming-out economy and will actually contribute to inflation on the upswing recovery. The mechanism of government spending is so slow and reactionary that trying to tinker with garden variety recessions is really just pissing away money.
Using Government spending as a means to fuel and stimulate economic growth is like eating at McDonalds. If you're at risk of starving to death it's necessary. If you've got other options, you're body's better not going there.