To Save the Economy Scrap the Keynesian Fantasy

To Save the Economy Scrap the Keynesian Fantasy - Forbes: "Many of the basic precepts taught today are wrong: Governments can stabilize economies; government spending stimulates economic growth, ditto easy money from a central bank; free markets are inherently unstable. John Maynard Keynes even propagated the pernicious notion that wasteful spending was better than no spending, when he talked about the virtue of paying people to dig holes and then fill them up. Moreover, most policymakers and economists don’t understand the basic nature of money: A currency facilitates transactions between two parties, alleviating the necessity of engaging in the cumbersome barter process.

Most governments still cling to the Keynesian fantasy, but reality is upending this deadening dogma. The western European debt crisis, led by feckless Greece, is continuing to have a profound and positive policy impact here in the U.S., to the point that even President Obama pays occasional lip service to restraining spending. We’ll still suffer from the prevailing yet wrongheaded economic theology, but profound reform is in the air."