NYT reports today that European governments are now rejecting the Keynesian prescription to spend your way out of a recession/depression/panic economic bad thingie.
Now, I’m largely economically illiterate – read Adam Smith a couple times and took a few econ classes in business school – so I probably just missed this point. Simple question: what’s enough? I’ve never yet come across a formulation of the Keynesian policy that said: you can spend up to X or X% of Y or any limit whatsoever. Nope. Just spend.
So, if $1 in deficit spending is good, $10 is 10 times as good. If a trillion dollars is good, 2 trillion is way better! How about $10 trillion? $100 trillion? Seriously, not only have I never heard what the natural or logical limit to debt spending is, I’ve never heard any Keynesian argument that there even is a limit.
I’ll consider getting on board the good ship Keynes as soon as it’s clear where it’s planning to dock, or indeed clear it has any interest in docking at all.