While not a fan of JMK, I feel obligated to point out to the folks in government that they should have finished his book. Yes, his policy calls for the government to stimulate the economy by issuing debt to get the velocity of money moving.
However, that part they forgot to read was when revenues started coming in, you are supposed to pay down the debt so that you had the ability to be stimulative again, when the cycle changed.
Seems like part I is fun. Part II is not. So our government just blew it off.
Part 2 never happens because Part 1 never works. If it did, then Obama’s stimulus should have worked. It didn’t.
However, that part they forgot to read was when revenues started coming in, you are supposed to pay down the debt so that you had the ability to be stimulative again, when the cycle changed.
Seems like part I is fun. Part II is not. So our government just blew it off.
That's very true. I too will not defend JMK, but most people get him wrong on that score. His deficit spending in recession proposition assumed also that in years of economic boom... Surpluses would be "banked" for the next recession. Something modern Keynesians have utterly ignored.