Getting Keynes Wrong?

[Annie]

How Obama got Keynes wrong - Feb. 5, 2010

I've said it many times, economics isn't my forte. With that said, after reading all the posts on what economic philosophy will best serve in this era:

How Obama got Keynes wrong


Allan Meltzer with Timothy Geithner (right) and Charles Plosser, Federal Reserve Bank of Philadelphia president (left)
Interview by Shawn Tully, senior editor at largeFebruary 5, 2010: 11:19 AM ET


NEW YORK (Fortune) -- The Obama White House likes to say that the theories of John Maynard Keynes form the foundation for its fiscal policies. Most notably, it draws upon the legendary British economist's idea of spending big to pull out of a recession.

But one economist says the administration has gotten Keynes only half right. Allan Meltzer of Carnegie Mellon is one of the most influential monetarists of the past 50 years. He has served in the Department of the Treasury under President Kennedy and on the Council of Economic Advisors during the Reagan Administration. He also authored the book, Keynes's Monetary Theory: A Different Interpretation.

While the Obama team is laying out huge sums of money, Meltzer says it's neglecting a key part of Keynes' plan: You can't run up a debt without a way to cover it...