The View From 1776
Wednesday, April 18, 2012
The GSA’s Keynesian Stimulus Program
Why are we upset that the GSA spent a reported $823,000 on a party for themselves?
If anything, Paul Krugman and his fellow liberal-progressive Keynesian economic worshippers should castigate the GSA for spending far too little. After all, it’s a fundamental principle of Keynesian economics that saving (what used to be called prudent regard for the future wellbeing of our heirs) causes economic recessions.
According to Lord Keynes, when workers spend less than what they are paid, each bit of saving reduces aggregate consumption and drags the economy down. Keynes recommended that government spend as much as possible in order to counter the theoretical drag of saving on the economy. The nature of government spending, in Keynes’ theory, is immaterial. Government could employ people to dig holes one day and fill them on another, endlessly repeating this useless activity.
The GSA’s party was in this grand tradition of Keynesian theory.