| Akvod said:
Japan is in a liquidity trap, where the interest rate is 0.1% and the government can't use monetary policy to stimulate the economy. Japan got out of its recesison, but only by a surge of exports. Germany right now is trying to play that game and looks like it's succeeding. However, this strategy cannot work for all the countries at the same time, in a global recession. |
So if it was growth in the export driven private sector that was the reason for the recovery in Japan, what benefit was there to increasing their national debt by 120% GDP through stimulus spending?
Keynesian economics are flawed because there is a substantial difference between someone being paid to "Dig holes and fill them in" and someone who is paid to produce goods and/or services that individuals would happily pay for.
