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President Obama has called for yet more Keynesian-style spending stimulus for the economy, including increased investment on government projects and expanded subsidy payments to the unemployed and state governments.
The package might cost $150 billion or more, with the president saying that we have to
"spend our way out of this recession".
The total Keynesian stimulus of recent years has included the Bush stimulus bill in early 2008, TARP, large increases in regular appropriations, soaring entitlement spending, the Obama stimulus package from February, rising unemployment benefits, and falling revenues, which are "automatic stabilizers" according to Keynesian theory.
But despite its magnitude, the deficit-fueled Keynesian approach to recovery is not working.
The time is long overdue for the Democrats in Congress and advisors in the White House to reconsider their Keynesian beliefs and to start entertaining some market-oriented policies to get the economy moving again, as Ronald Reagan implemented with stunning success...
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