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Title: The Strange Death of Fiscal Policy
Source:
NY Times
URL Source: http://krugman.blogs.nytimes.com/20 ... trange-death-of-fiscal-policy/
Published: Nov 3, 2010
Author: Paul Krugman
Post Date: 2010-11-03 21:41:14 by go65
Keywords: None
Views: 1452
Comments: 8
One clear result of the midterms is that we won’t have anything like a further round of stimulus. And this, in turn, means that the narrative all the Very Serious People will tell is that fiscal policy was tried, it failed, and that’s that. But the real facts don’t at all support the conventional wisdom. Actually, let me focus on an international comparison. You often hear the US experience contrasted with Germany: America, we’re told, went for Keynesian policies, while Germany chose austerity, and Germany did better. But as far as GDP is concerned, Germany did not, in fact, do better: Yes, Germany did better on employment — but this reflects policies that American conservatives surely don’t support, including employment subsidies, strong unions, and rules making it difficult to fire workers. And what may be even more surprising: if we look at actual government purchases of goods and services, as opposed to transfer payments (many of them just payments from the federal government to states), Germany was more Keynesian than the United States: So, it’s an amazing thing: Obama and company have managed to convince people that big government failed, without actually delivering big government. Update: Just to be clear, I’m not saying that the Germans were big Keynesians; the point is that neither of us were.
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#1. To: jwpegler (#0)
ping - thought you would this of interest.
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