Doug Henwood asked, >I've given up trying to get a response to this sort of thing from the >cranks on PKT. Any reactions here? In a word, "hubris". >So today's WSJ article on Keynes says: > ><quote> >But the 1990s boom has also had a distinctly reverse-Keynesian flavor. >Countries that made the tough decisions to reduce their deficits have >thrived, as supportive financial markets rallied, further discrediting the >old Keynesian thinking. For a 1996 report on fiscal policy around the >world, IMF economists conducted a detailed study of 62 attempts by >industrial countries over the prior quarter-century to get their finances >in order. The study concluded that the 14 cases where governments had been >the most draconian -- notably Denmark and Ireland in the mid-1980s -- >resulted in the fastest growth. "The simple 'Keynesian' view of fiscal >consolidation is that lower government purchases or higher taxes reduce >aggregate demand," the report said. Instead, it concluded, "there may be a >virtuous circle between economic growth and debt-ratio reduction." ></quote> regards, Tom Walker
