Paul Krugman recently argued that a fake threat from space aliens would be good for the economy because the people of earth would waste a bunch of money building unnecessary defenses.
That was a bit loopy, as I noted a few days ago, but other Keynesians also have been making really weird assertions. Obama’s Secretary of Agriculture (another department that shouldn’t exist) just said that food stamps are a great form of stimulus (video at the link, for those who think this can’t possibly be true).
Makes me wonder if they’re having some sort of secret contest for who can say the strangest thing on TV. And if that’s the case, Nancy Pelosi has to be in the running for her claim that you create jobs by subsidizing joblessness.
Appearing on Judge Napolitano’s show, I explained why the Keynesian theory is misguided.
Unfortunately, Keynesians are immune to evidence. No matter how bad an economy does when the burden of government increases, they just point to their blackboard equations and claim things would be even worse without the so-called stimulus.