Have Keynesian Economists Been Delt the Perfect Hand?
With the latest news that GDP fell at the annualized rate of 3.8% in the fourth quarter of 2008, Obama and his administration are preaching the urgent need to pass the stimulus package currently before the U.S. Senate. There is however, a great deal of debate as to whether or not this package is heading in the right direction. It is large enough? Should it focus more on spending and less on tax cuts or vice versa? From this article it is plain to see that there are many opinions and some are very contradicting. Economist Debate But contradicting opinions can be helpful in the learning process. The way I see it is if and when this stimulus plan is put into place it may possibly be the perfect situation to truly test Keynesian Fiscal Policy. The question is: Are we willing to take a trillion dollar gamble? If not we could always turn to China and Russia. Vladimir Putin and his Chinese counterpart are publicly critiquing the U.S. macroeconomic policies. Maybe we should ask them for advice.