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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: Little Joe who wrote (96585)4/17/2009 2:57:48 PM
From: Claude Cormier1 Recommendation  Read Replies (2) of 116555
 
|| But the point is we will never know if Keynes is right because every government that claims to follow his principles manages the spending part well but never pays down the debt.

In fact we have an example that the opposite was right.

Australia, during the great depression, did rather well compared to the USA. From an unemployment rate of 23% in 1932 they went straight to 8.9% in 1938. That compares well with USA's 19% in the same year.

For that, Australia had no "New deal". Right from 1931, they went lean and mean cutting expenses in an effort to maintain a balance budget.

Keynes theory has been discredited by many including Frederic Hayek. Keynes himself is said to have admit in a 1946 editorial published in his Economic Journal that he should have listen a bit more to the classical school of economy which was (is), as he said, full of truth.
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