We’re told by proponents of Obama’s spending in the name of stimulating the economy policies is based firmly in the economic traditions of John Maynard Keynes. Except, what Obama and his fellow Democrats are doing would be objectionable even to Keynes himself:
As Allen Meltzer has argued, Keynes was against the very sort of large structural deficits that characterize contemporary federal budgets and policy, believing instead that deficits should be “temporary and self-liquidating.” And Keynes believed that any sort of counter-cyclical spending by government should be directed toward increasing private investment, not simply spending current and future tax dollars on public works projects.
Or, to put it another way: If the federal government had a strong track record of responsible spending, it would mean one thing if it went into hock for a short period of time to goose the economy (again, whether this would work is open to question). It means something totally different when a government that spent all of the 21st century piling on debt and new, long-term entitlement programs responds to an economic downturn first by creating yet another gargantuan entitlement (Obamacare) and taking on even more debt in the here-and-now.
We can debate about whether or not Keynesian economics work, I suppose, but one thing that should be beyond debate is the folly of running up huge amounts of long-term debt.