I find this article simply untrue, the fact that Keynesianism has been a sound economic theory for almost 80 years and is now being undermined isn’t right.
It is correct, in stating that the money governments spend has to come from somewhere, mainly out of the ‘economy’s pocket’ but when borrowing occurs, it borrows onto the government debt, meant to be re-payed in times of prosperity. It does not simply redistribute wealth right there and then. What the government should be doing, is borrowing now, whilst the economy heads to recession, and increase spending in order to bolster consumer spending and investment, but then be taking the money out of the economy in the good times, ‘the boom’. This way the two extremes of the standard boom and bust economic cycle are softened and the standard of living can still increase over time with recessions being shallower and shorter, and booms not being so dramatic and, increasing inflationary pressure.
