Conn Carroll
The liberal freakout over anti-Keynesian spending cuts
According to the Congressional Budget Office (CBO) score of the legislation, the debt limit deal will cut $25 billion in 2012 and $47 billion in 2013. $25 billion may sound like a lot, but the federal government spends almost $300 billion a month and will spend $3.7 trillion in 2012. $25 billion also amounts to less than .7 percent of all government spending and less than .2 percent of GDP.
Hard-core Keynsian Suzy Khimm claims that a 1 percent of GDP cut to government spending reduced GDP by .5 percent in two years. So at .2 percent of GDP, by Keynsians own numbers, the debt limit deal will lower GDP by .1 percent. That is a rounding error at best.
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Uh, to who?
Kataklysmic on August 2, 2011 at 2:46 PM
These people are absolutely insane.
jawkneemusic on August 2, 2011 at 2:46 PM
Keynesians wouldn’t be Keynesians if they understood this at all.
blink on August 2, 2011 at 2:46 PM
Well, I certainly hope that Durbin is right that this is the end of Keynsian economics, but I don’t think we will be that lucky.
Count to 10 on August 2, 2011 at 2:49 PM
Every bad economic number that comes out in the next year and a half will get blamed on this .7% “cut”.
forest on August 2, 2011 at 2:53 PM
Remember, Keynesians still think the money comes from nowhere, and that the act of getting it doesn’t prevent any economic activity.
Count to 10 on August 2, 2011 at 2:53 PM
I’m not sure John Maynard Keynes would be labeled a Keynsian today. IIRC he didn’t believe in deficit spending in perpetuity.
flyfisher on August 2, 2011 at 2:54 PM
I’m not sure John Maynard Keynes would be labeled a
KeynsianKeynesian today. IIRC he didn’t believe in deficit spending in perpetuity.flyfisher on August 2, 2011 at 2:54 PM
flyfisher on August 2, 2011 at 2:56 PM
Yes.
I’d like to add that:
The reason Keynesian economics is ingrained into so many people is because it has been taught to so many students at universities.
The reason that it has been taught to so many students at universities is because universities have loved teaching it over the past several decades.
The reason that universities have loved teaching it over the past several decades is because Keynesian economics completely endorses socialism.
blink on August 2, 2011 at 2:58 PM
I’m sure this will be tried, but I don’t think this will stick.
blink on August 2, 2011 at 2:59 PM
Truer words were never spoken.
Curious that the Left has yet to use that word…. To much ‘on the nose’ projection?
Chip on August 2, 2011 at 3:00 PM
Just remind them with the phrase:
The Obama Recession, you bone it, you own it.
Chip on August 2, 2011 at 3:01 PM
Indeed. These cuts — or rather, even greater cuts — would be Keynesian from the Dems’ point of view. They always remind us of how the economy is recovering and the recession ended over a year ago. In such non-recessionary times, Keynes recommended switching from deficits to surpluses. So calling it non-Keynesian would be reversing their earlier claims about the end of the recession.
calbear on August 2, 2011 at 3:16 PM
What makes you think they will do it then?
Monkeytoe on August 2, 2011 at 3:24 PM
If govt spending solves everything, why is ND’s unemployment rare 4% while CA’s is 12% when CA spend much much more per capita than ND?
Bueler, Bueler, Bueler, Frye, Frye? Anyone?
angryed on August 2, 2011 at 3:29 PM
You have to Hope that if they had no other choice, they would chose that instead of the whole house of cards collapsing.
But it would also be intelligent for them to not let it get that far.
Chip on August 2, 2011 at 3:31 PM
The problem with Keynesianism is that for every multiplier effect you get with a dollar of gov’t spending, there’s an equal negative multiplier effect for when the dollar was taxed out of the private sector. It’s called the Broken Window Fallacy. And it destroys the entire concept of Keynsianism.
AUH2O on August 2, 2011 at 3:39 PM
Don’t you mean “greater negative multiplier”? Also, it doesn’t really matter all that much if the money is taxed or borrowed, it still causes about the same amount of damage when it is spent.
Count to 10 on August 2, 2011 at 3:49 PM
These folks have a bit of trouble with the whole thing.
http://www.youtube.com/watch?v=gBrHkxqNT7s
a capella on August 2, 2011 at 3:51 PM
I didn’t see a wooden stake in his heart. I think Durbin is his Renfield. I think I saw Durbin eat a bug.
cartooner on August 2, 2011 at 3:51 PM
We really need some monetarists in charge in Washington.
rockmom on August 2, 2011 at 3:55 PM
Do you mean like the people printing money at the Fed?
Count to 10 on August 2, 2011 at 4:19 PM
Freakout? Cool.
Ward Cleaver on August 2, 2011 at 4:19 PM
It’s time to re-animate Milton Friedman.
Ward Cleaver on August 2, 2011 at 4:20 PM
Good. We need to kill Keynesian economics before it kills us.
Dr. Charles G. Waugh on August 2, 2011 at 4:30 PM