To: Robohogs who wrote (138787 ) 10/14/2013 6:02:21 PM From: RetiredNow Read Replies (2) | Respond to Interesting distinction. Keynesianism can be applied to both fiscal and monetary policy. The fundamental tenant of Keynesianism is to accumulate surpluses in good times to use to stimulate the economy in bad times, thus smoothing out the business cycle to minimize economic disruptions. On the monetary front, he advocated for the use of monetary tools such as interest rates and liquidity to also provide stimulus. It's great in theory, but when in reality, the way the Keynesians in this country have implemented it is that we have endless stimulus and never have I seen a surplus, except briefly during Clinton's tenure. So Keynesianism has been a proven flop in that it masks the root causes of economic failure, such that we are spiralling towards greater and great instability, while destroying the purchasing power of the dollar. One of the negative impacts of Keynesianism is the destruction of price discovery, which means we've moved to primarily a Centrally Planned Economy, which in history has been proven to be far inferior in the allocation of capital for the maximization of economic growth and jobs over the long run.
