I've heard many both in the media (Paul Krugman) our government (Geitner, Paulson) say that Keynesian stimulus and Demand-Side economics is the way to solve our problems. They are wrong. Why? For a simple fact that modern Demand-siders ignore, a feature Keynes never had to consider when he formulated his theory. Americans now import more than we export. The fundamental idea behind Demand-Side economics is this: giving cash to consumers increases demand, which increases prices, and eventually profits, allowing for an expansion of production and thus the economy. In Keynes' time, America produced more than it consumed, and so any money given to consumers went directly to American factories. Today, we import more than we export. Thus, when the average lower-middle-class family gets a Stimulus check, they will go to Wal-Mart and purchase goods made in China. Rather than seeing American retail, manufacturing, and raw resource production industries benefit from the Stimulus, China sees the majority of the benefit. This is why Demand-Side economics, and the Stimulus, are failing modern America. By stimulating demand via redistribution programs like the stimulus, we are primarily stimulating countries like China, Japan, and Mexico. Since Americans would rather buy the cheaper, readily-available imports, American producers never see the Stimulus money, and so they don't earn the profits they need to expand. No American profits means no new American jobs. Thus, American producers cannot expand and create new jobs, which means unemployment stays high. Surprise surprise, unemployment continues to skyrocket despite all our Demand-Side stimulus. Understanding this, can we be surprised that Washington is calling this a "Jobless Recovery?" As long as Obama follows the obsolete Demand-Side economics, his efforts will continue to fail and we will continue to fall. P.S. Nor am I advocating for Supply-side economics. Both Supply and Demand need to maintain proportionality, or else any economic growth will be unstable and lead to bubble-formation.