What’s the definition of insanity again?

10 May

Doing the same thing over and over again and expecting different results. That sounds about right.

Robert Barro over at the Wall Street Journal gets it. His opinion piece, Stimulus Spending Keeps Failing, show’s what a disaster these repeated keynesian programs are.

Once a comparatively low public-debt nation, Japan apparently bought the Keynesian message many years ago. The consequence for today is a ratio of government debt to GDP around 210%—the largest in the world.

This vast fiscal expansion didn’t avoid two decades of sluggish GDP growth, which averaged less than 1% per year from 1991 to 2011. No doubt, a committed Keynesian would say that Japanese growth would have been even lower without the extraordinary fiscal stimulus—but a little evidence would be nice.

While the whole article is good in itself and mentions the path’s taken by Germany and Sweden as a successful alternative to the other nations of the Eurozone and the United States. The key point of the article is that keynesian economics simply don’t work.

Nope, not Ben Bernanke, just suburban mom

Why this needs to be explained repeatedly and to almost no effect is the mind-blowing part. When you create a problem by doing one thing, how you can come to reason that doing more of the same thing will solve the problem? You simply can’t spend your way into so much debt as to create a recession and then expect to buy your way out of it.

Do you tell someone with lung disease to switch to unfiltereds? Do you tell someone with diabetes to gorge on Pepsi and Oreos? Do you tell an alcoholic to swim some laps in a vat at the Budweiser brewery? No, No, and No.

Any mildly intelligent person knows that in order to fix a problem you have to first eliminate the cause. Once this is done you create an effective and healthy plan that allows for a smooth transition from the reckless ways of before to a responsible sustainable future. It’s not easy and it’s not automatic, but nothing worth keeping ever is.

UPDATE: Just read a similarly voiced post at rhymes with cars and girls. The use of Fast Times at Ridgemont High metaphor just did it for me.

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