Why Stimulus Fails

The Obama Administration stimulus package, based on widely accepted Keynesian principles, did not succeed. There is little agreement on why. Some liberals say the stimulus should have been bigger. Some conservatives says tax cuts would have been better than spending increases. Some oppose deficit spending at all times and attack Keynes for what they regard as a pernicious theory. Keynes, in fact, probably had it right for his own time, when employers were largely driven by the small part of the economy that was visible to them. In the internet age, when the business community understands that an increase in aggregate demand proceeds from a short-term flood of politically directed checks, Keynesian-based stimulus will probably fail