Saturday, October 23, 2010

Is anyone a Keynesian now?

That's a paraphrase of one of Richard Nixon's most famous quotes: "We're all Keynesians now."  Actually the quote is from Milton Friedman, who less famously said in the same sentence that "nobody is any longer a Keynesian."  So much for irony and the mass media. 

The answer in Europe seems to be "no," as indicated by an NYT article this week.   The United Kingdom has announced plans to cut spending by $130 billion and drop 500,000 public sector workers.  Austerity programs also are in place in Greece and Ireland.  France has raised the retirement age from 60 to 62. 

There appear to still be strong believers in stimulus in the Democratic Party in the US, but not so much among Republicans.  Looking for more irony?  If predicted Republican gains in the Nov. 2 election materialize, will they (like the Obama administration in 2009) look to Europe for policy inspiration? 

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