How Keynesians Have Gotten It Wrong
Wednesday, Feb 10, 2010
- They can't explain the depression of 1920-1921, which had a worst first year than the Great Depression, government cut spending, no stimulus, yet the economy bounced back in a year.
- After World War II, they predicted another depression and high unemployment because of the 10 million soldiers coming back. The exact opposite happened, and the years after WWII were not only okay, but the most productive in the history of the U.S. as government cut spending.
- They said stagflation was literally impossible. It happened in the 1970s.
- They said the Soviet Union would eventually outgrow the U.S., and continued saying it even until 1989, a year before its complete economic collapse.