re: #129 ralphieboy

Keynsian economy is based on the notion that even a sound economy has periods of contraction, and the government has an interest in intervening to ease the social effects of the business cycle.

Problem right now is that the economy is so broken that the Keynian model is hardly applicable. The collapse of Greece and the near collapse of the euro showed that.

Europe is faced with the unpleasant necessity of consolidating and cutting government spending so that the overall economy remains stable enough for Keynian principles to become applicable again.

This is like saying that my car is so broken the laws of physics are no longer applicable. Keynes constructed a model, called the “general theory” that really is the economic equivalent of newton’s laws.

You may not like the particular implementation, but the general theory is very sound.