Nathan Lewis kommenterer på "stimulus" og stramninger

It seems that I hardly comment on current economic events anymore. I have the impression that everything is following the well-worn paths with a certain astronomical predictability. First comes the "stimulus." Then comes the "austerity." Then comes the "stimulus" again. The eventual result is disaster.

I don't think governments will be able to get off this merry-go-round of decline and deterioration until they stop using these words "stimulus" and "austerity." Just the use of those words shows a certain fixed mindset leading to certain predictable conclusions.

"Stimulus" is mostly a big waste of money. Goverments everywhere love this, because it gives them a rationale to do what they do best, which is channel taxpayer funds to their political base: politicians, bureaucrats, public employees, and corporate cronies. The typical politician is worried about their support in the midst of recession anyway, and there is no law of nature more ingrained in the politcians' consciousness than that handing out money is the best way to make friends. This waste of money often takes the form of disorganized spending on "public works" or similar boondoggles. This time around, the government has had a lot of bailouts, mostly of bankers although also the automakers and state governments. This all tends to get swept into the "stimulus" category although it is not really what Keynes had in mind.