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Thursday, January 29, 2009

No, Mr. President, we're not all Keynesians now

The Cato Institute took out a full-page ad [PDF] appearing in the Wall Street Journal, New York Times, and Roll Call yesterday. The advertisement insists that U.S. president Barack Obama is wrong about the non-existence of disagreement about whether or not the government should push through a "recovery plan" to help the faltering economy.

The advertisement quotes Obama as saying that, "There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy," on January 9. In large font, the advert responds, "With all due respect, Mr. President, that is not true." Before a long list of signatories, the advert continues:

Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we the undersigned do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan's "lost decade" in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policymakers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth.

Posted by P.M. Jaworski on January 29, 2009 in Economic freedom | Permalink


The Republicans had an alternative stimulus plan which called for large tax cuts and held the line on spending. How come Mr. Bipartisan Obama didn't allow a vote on this plan.

Posted by: Toby | 2009-01-29 2:49:50 PM

Does the name George Santayana ring a bell? either the Americans do not know their own history or they will themselves to ignore it. To study Civics without studying the history is folly. In Alberta the Department of Education has built a Social Studies Curriculum that spot checks history and that spells disaster.

Posted by: DML | 2009-01-30 1:01:11 AM

Obama's administration will not fail because they have failed already.

Posted by: Carlos | 2009-02-17 2:18:12 PM

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