Posted tagged ‘deflation’

Obama: A Dedicated Follower of Keynes

March 12, 2009

Keynes was a macroeconomist from the 1900s. He lived in a time of deflation and recession. He argued that the solution to both problems was to print money and spend it on infrastructure. This would stimulate the economy and put an end to deflation. Sound familiar?

Well, not really. While Keynesian Economics work in the short term with economies in recession due to deflation. However, we aren’t. The world is in recession for inflation and government failure (when the government intervenes in market failure, creating a vaster mess than before).

So, when Obama believes this policy and defends it publically, we must remember that now is not the time, and while ‘yes we can’, we’d better not.

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