Here’s a letter to the Wall Street Journal:
Alan Blinder offers the following advice to Uncle Sam: “Don’t reduce the deficit too aggressively right now, while the economy is still weak and needs all the spending it can get. Instead, enact laws today that will reduce the deficit substantially, but several years down the road, when the economy will presumably be stronger” (“The Economy Needs More Spending Now,” July 8).
Pretenses to the contrary, such Keynesian counsel is decidedly unscientific. It ignores the powerful incentives of politicians to spend excessively today and to fund too much of that spending with funds borrowed from future generations. These incentives drove Uncle Sam to run budget deficits for 45 of the past 50 years – many even in boom years when Keynesian theory advises against such deficits.
If a physicist describes on paper a plan that, under certain precise assumptions, will produce vast amounts of energy at zero cost, no one would take that physicist seriously if a key assumption necessary for his plan to work is that the source of this energy be a perpetual-motion machine. Even ignoring its other flaws, Keynesianism offers a policy scheme built on an assumed political reality equivalent to that of a perpetual-motion machine – namely, politicians with discretionary power who regularly and willingly sacrifice their own personal interests in order to further the public interest.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030