23 February 2010

Contra Keynes

Why Government Spending Does Not Stimulate Economic Growth: Answering the Critics by Brian Riedl.

I haven't finished it yet, but the basics are sound. What it boils down to is that there is no such thing as a free lunch and short-term government spending intended to spur the economy merely moves money from one use to another through an intermediary (the government).

I'm not foolish enough to believe that all resources are utilized in the most efficient manner, but I think there is overwhelming evidence that most resources tend to move towards efficiency. If left alone markets will indeed clear. That is, of course, until an outside force consciously shifts resources in such a way, usually with the best of intentions, to help the public good.

It doesn't.

1 comment:

オテモヤン said...
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