World-News

By John Cook

A new piece of evidence has emerged in the debate over the effectiveness of President Obama's 2009 stimulus package, and it's not good for Democrats.

http://www.informationclearinghouse.info/article26393.htm

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Old theory of Keynesian stimulus comes up against hard new facts

Cato Institute
by Alan Reynolds

09/15/10

The Republican alternative to more fiscal stimulus says [Dana] Milbank, is for government to ‘do nothing, and let the human misery continue.’ Any doubts about the efficacy of fiscal stimulus, he argues, were discredited by the remarkable discovery that recessions still happen: ‘Economists offering alternatives to Keynes devised mathematical models showing how markets would behave efficiently. But those ideas collapsed along with everything else in 2008.’ This is ignorant nonsense. Efficiency never meant markets can’t be surprised and crash. Besides, academic criticism of fiscal stimulus is mainly based on fact, not theory...

http://www.cato.org/pub_display.php?pub_id=12143



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