Finally, the truth

Nick Gillespie, writing in Reason, has finally put forth the truth about Keynesian economics: what Obama and the Obamacrats have done and want to continue is NOT Keynesian or even close to it. Here is how Gillespie puts it: "Keynes was against the very sort of large structural deficits that characterize contemporary federal budgets and policy, believing instead that deficits should be 'temporary and self-liquidating.' And Keynes believed that any sort of counter-cyclical spending by government should be directed toward increasing private investment, not simply spending current and future tax dollars on public works projects."

In other words, shoveling money to states to pay pensions for public employees is not a stimulus under Keynesian theory; it is a payoff to teachers' unions. Sending grant monies to universities to study the mating habits of elk is not stimulus (except for maybe the elk), it is a payoff to academia. Even using federal money to pay for repaving roads is not Keynesian stimulus; it is just moving money around. It takes money out of the pockets of some to put it in the pockets of others. There is no multiplier, so there is no real stimulus. Keynesian expenditures have to be for things that increase private investment, things like investment tax credits for new equipment and plants, matching grants for developing new technologies that are acceptable to the market, etc. If the Democrats had actually spent the stimulus money on items like these, we might now have much lower unemployment.