The Keynesian framework rejects a balanced budget, and calls for fiscal stimulus through budget deficits, especially when lowering interest rates fails to end stagnation. Thinking about the economy as driven by spending is once again accepted as basic macroeconomics.
Milton Friedman is probably rolling around in his grave tonight as the free market economy theories are proving useless and a revival of John Maynard Keynes has arrived. Duncan Cameron over at Rabble.ca argues it is time to give Keynes another look for the best package of policies to fight stagnation, recession, or worse.
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