A couple of years ago, Japan’s Prime Minister Shinzo Abe instituted a program that made Keynesians everywhere wer their pants with joy. Abenomic consisted of fiscal stimulus (i.e., spending), quantitative easement (aka inflation) and structural reform. The result?
Japan is now in a recession. Oh, and their debt is up 230% of the GDP.
Now doubtless the Keynesians will have explanations for it. Keynesianism can never fail; it can only be failed. The Hoover years didn’t disprove anything. 1946 didn’t. The 1960’s didn’t. The 1970’s didn’t. 1993 didn’t. Like the Communists of old, Keynesians believe their pet theories are proven laws of nature and if the facts don’t fit the theory … well, ignore the facts. Their biggest excuse is that Japan raised sales taxes by 3%. I would submit that if that kind of modest tax hike derails what the Kenyesians themselves labelled as the best test yet of their theories, your theories are bullshit.
Oh, one economy that is starting to grow? Greece’s. This also shouldn’t be happening because of the austerity. Nor, as a matter of fact, should our economy be growing.
At one point does the mere thought begin to speculate about the merest possibility of crossing our minds that Keynesianism doesn’t work?
(All of the above comes with the caveat the most “Keynesians” these days are actually pseudo-Keynesians. They love the part where you spend during a recession. They’re not so keen on cutting spending during growth. Practically, Keynesianism is less an economic theory than an excuse to perpetually grow government.)