The Great Neoliberalism Debate of 2011 Has Now Been Resolved ( I Think This is What They Call Beating a Dead Horse)

30 Jul

Though the Great Neoliberalism Debate of 2011 now seems like yesterday’s news—probably because it is—the second-quarter GDP estimates that were just released should bring us back to where that debate began: with a question about what is the “single best thing” the government could do to create jobs and stimulate the economy.

In case you haven’t heard, things suck: almost no growth at all.  As all the commentary makes clear, the major problem is low consumer demand and falling government spending.  People aren’t spending the money they don’t have; businesses aren’t spending the money they do have; government is not spending the money it could have. As all the commentary makes equally clear, there is a solution: government action on the fiscal front.  Government needs to spend, government needs to hire. That will put money into people’s pockets, pump up consumer demand, and push firms to hire.

Hmm, I seem to recall someone saying something similar not so long ago.

Interestingly, in the face of this latest economic news, I haven’t heard many people running to the Fed and demanding that it increase its inflation targets—a proposal that sounds increasingly like a solution in search of a problem.

One Response to “The Great Neoliberalism Debate of 2011 Has Now Been Resolved ( I Think This is What They Call Beating a Dead Horse)”

Trackbacks/Pingbacks

  1. The Political Power of Economic Ideas « thecurrentmoment - August 16, 2011

    [...] austerity: the economic limits of the state. An important feature of what the blogosphere calls the neo-liberal progressive turn in the Democratic Party has been the idea that the state can only play a limited economic [...]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 2,589 other followers