Sunday, August 19, 2012

When Conservatives Loved Keynes



Greenstein is taking the sensible position that the 2001 recession seems mild enough that Keynesian tax cuts will not be needed -- by the time their stimulative effect kicks in, the economy should be growing again. Hassett, the conservative, replies that Keynesian fiscal policy during recessions works, and the only problem is that it's usually too small. And Ryan agrees!

Ryan and Hassett, of course, fiercely opposed the concept of fiscal stimulus in 2009. I don't see how you can explain progressing from that position to opposing Keynesian stimulus during a severe liquidity trap, the worst economic crisis since the depression, except as a function of pure partisanship.

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