Is Keyensian Economics Bunk?

[GoodCallYouWin]

Milton Friedman argues, using Japan as a case study, that both reducing taxes and increasing government spending do not stimulate the economy (running of course contrary to the popular notion that the 'new deal' saved America from the Great Depression). Is this true? Does this mark the death of Keyensian Economics? What replaces the Keynesian view?

[tomdemaine]

I think Keynesian Economics has been considered bunk for a considerable length of time at this point.

[Misfire]

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What replaces the Keynesian view?

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When you put out a fire, what do you replace it with?

[Bill Haywood]

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....contrary to the popular notion that the 'new deal' saved America from the Great Depression

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I've never read anyone who says the New Deal ended the Depression. Plenty of people argue that military Keynesianism (ie WWII) ended the Depression.

Keynesianism is still popular. People follow Keynes or the monetarists based on which class they identify with. Corporate types find monetarism most efficient at enriching them, while labor folks don't want to be the ones losing out in undampened market cycles.

At least the rich SAY they like the monetarists. In actuality, they are addicted to Keynesian spending in the form of massive military deficits. Much of the economy thrives on Keynes, they just prefer to call it defense.

Stand by for a whole bunch of posts saying that if growth occurred, it proves the economy involved was actually free, not managed.