[expatpat]

T be fair to Keynes, he would NOT have encouraged a so-called stimulus like the Obama-Pelosi white-elephant. He knew that it could only work if two condition are met:

1. The money multiplier is above about 2,
2. The money was used to stimulate the private, productive sector of the economy.

Neither of these conditions were met. The multiplier was already below 1.0, and falling, and most of the stimulus was used to save the jobs of non-productive, public employees, instead of stimulating the private sector.

Nevertheless, it is clear that Keynesian stimulation is of limited value. The fact that the money multiplier has to be 2 or above makes it useless in situations where it would be most needed.

[MontaniSemperLiberi]

“The money multiplier is above about 2...”

Interesting. Do you have a quote from him on that? It is a wonderful slam of Krugmanism.