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The US has been doing extremely half-assed Keynes. It's not working because the bills haven't been large enough to have a measurable effect. Fundamentally I think the problem is the US has been too risk-averse. We've been hamstrung by our inability to accept that we have to take big risks to solve big problems, instead we're neutering any sort of solution to the point here it doesn't present a risk, and consequently can't present a true solution.

I think there's a similar issue with this economist article. The assumption that there is a "correct choice" I think is wrong. There are a variety of bad choices, and it's probable that extremely risky choices are the only ones that have a chance of solving the crisis.




You're making economics sound like a religion rather than a science, there. If Keynesian economics hasn't worked in the US, then there's two possibilities:

1. It was too small or wrongly applied, or

2. Keynesian economics doesn't really work


It's also worth separating the descriptive and prescriptive aspects of Keynesian economic theory. On the descriptive aspects, it seems to be doing fairly well so far. In particular, Keynesian models predicted that we wouldn't suffer significant inflation from the stimulus program + QE/QE2, due to a liquidity trap, whereas some monetarist models predicted that high inflation would result (and the Austrians were even predicting hyperinflation). Since high inflation hasn't materialized, that seems like at least some evidence in favor of the Keynesian macroeconomic models.


For actual Economic theories with a causal basis, the Austrian School wins with Von Mises the clear leader. Keynes simply can't work and never will - more Keynes means an even worse economic disaster.




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