I read a really good quote last fall: "It took the government to put the 'Great' in 'Great Depression'".
We are being pounded by the steady drumbeat of the need "to do something". Last year I remember reading a quote from a congressman when the TARP bill was being passed that "we need to act fast - there's no time to figure out if we're doing the right thing, we just have to do something". Ugh.
Obviously the Obama administration is pushing the stimulus package heavily. Just today it passed the House easily. The media for the most part just repeats the tired old lines.
Here's what people should pay more attention to: Keynesian-style stimulus doesn't work. It didn't work in the 1930's, or the 1970's, or in Japan in the 1990's. And we want to do it now why?
I think a big reason is because on the surface it sounds right. There is a real problem here of intuition leading people astray. But intution often doesn't work well in analyzing complex systems. I've seen no actual explanation about why the proposed stimulus is going to work and why it won't be a long-term problem. In fact, the supposed argument for why it will work completely ignores the long term problem.
Why aren't people more disturbed that they do not point to a case where government spending expansion has worked in the past to get an economy out of recession?
I was happy to see a report of an ad taken out in Newspapers by several leading economists, Nobel Laureates among them, coming out against any kind of stimulus. See it here.
I know that such opinions are going to get lost in the noise. There is a tendency toward *wanting* the government to be big brother - to take care of us. Someone to just come and *do something*, *anything* to just make this go away. Arguments about reality be damned.
These are the types of opinions that were lost in the noise when *last year's* tax stimulus was passed. Or when the TARP bill was passed. Or when the "Big Three" car company bailout bill didn't pass - but Bush did it anyway (with Obama's urging right along with it).
Another big factor here is a sort of self-selection issue. That is, those who are most likely to pursue government positions are those that believes government is the answer to any problem. Plato recognized this dynamic thousands of years ago and said that the best rulers would be those that don't want to rule. Which is quite a paradox indeed.