Ironically, although Keynesian economic theory has always been known to be a fraud, the failure of the “stimulus” package doesn’t really prove the point because the stimulus package was never anything more than a political slush fund for bailing out failed union pension funds and keeping Democrat municipal governments afloat. Very little of the $800 billion actually went to anythiny normally associated with “stimulus”. It was mostly used just to pay bills.
And so now the Keynesians have to either admit that they and their theories are abject failures or nod that yes, the stimulus package was a massive, brazen theft by their Democrat party on behalf of political special interests. What to do, oh, what to do...
Keynes theory is based upon expenditure by govt, not necessarily where it goes. The money gets spent regardless of the "first" recipient, makes it's way into the economy and finally into the banks. I would say that indeed Keynesian theory has thus failed, that private sector money has a greater multiplying effect than redistributive money.
Just my take...
It was a huge ‘mob bust-out’ (Google that).
I agree. The White House knew the “Stimulus” wouldn't lift the economy because it wasn't focused anywhere. But they expected the cycle would trend up as usual within a year and they would take credit for it.
Had Obama channeled FDR's ghost he might have bought up $850 billion of repo housing in key markets and demolished it.