Economics quote of the day
Mark Perry posted this as a
quote of the day and I agree:
Quote of the Day
If you believe the Keynesian argument for stimulus, you should think Bernie Madoff is a hero. He took money from people who were saving it, and gave it to people who most assuredly were going to spend it. Each dollar so transferred, in Krugman�s world, generates an additional dollar and a half of national income. The analogy is even closer. Madoff didn�t just take money from his savers, he essentially borrowed it from them, giving them phony accounts with promises of great profits to come. This looks a lot like government debt.
If you believe the Keynesian argument for stimulus, you don�t care how the money is spent. All this puffery about �infrastructure,� monitoring, wise investment, jobs �created� and so on is pointless. Keynes thought the government should pay people to dig ditches and fill them up.
If you believe in Keynesian stimulus, you don�t even care if the government spending money is stolen. Actually, that would be better. Thieves have notoriously high propensities to consume.
~John Cochrane
This is so spot on and really clarifies my whole issue with the stimulus program and with Keynesian economics.
Posted by DaveH at September 12, 2009 9:23 PM