Re: Keynesian State of the Union

[Clifford Poirot <cpoirot@xxxxxxxxxxx>]

Or what. He is a supply sider. There is some similarity between supply
siders and Keynesians on deficits, but this is superficial.

A Keynesian strategy would focus on deliberate incurring of deficits to aid
the states with their fiscal problems, while providing targeted tax relief
for lower and middle income families. Though some on this forum would
disagree, I would also argue that a Keynesian strategy would never have
"accidentally" incurred a deficit by large tax cuts at a time when the
budget was only precariously balanced. A Keynesian strategy would be short
term, with the deficit designed to disappear when the economy returned to
full employment.

An interesting side note to all this is a brief article in today's WSJ on
Bush's new economic advisors, including deficit hawk Greg Mankiw. Bush's
policies are the direct opposite of what one would propose upon a reading of
Mankiw's text (I'll leave aside the issue of whether that is good or bad).
Mankiw's view of deficits is pretty much regarded by supply siders with
derision, who view Mankiw's quasi-New Keynesian, quasi New classical
synthesis as mere justification for tax and spend policies. I doubt this
signals a change in policy direction for Bush. I wonder if Mankiw will now
revise his textbook.

-----Original Message-----
From: slarson [mailto:slarson@xxxxxxxxxxxx]
Sent: Wednesday, January 29, 2003 7:38 AM
To: pkt@xxxxxxxxxxxxxxxx
Subject: Keynesian State of the Union


Accelerated tax cuts and sustained 4% p.a. increase in gov't spending. IS
THIS
PRESIDENT A KEYNESIAN OR WHAT???

--
Dr. Sven R Larson
Department of Economics
Skidmore College
815, N. Broadway
Saratoga Springs, NY
(518) 580 5278