“It’s like we rounded up all the idiots in the country and put them in one city and called them our leaders.”

And the answer to your question, from a lefty anyway, would probably set up another straw man. They’d protest that it was deregulation that caused the crash. I’m sure you’ve heard this argument. And yet, sound economics tells us that if we try to artificially lengthen times of prosperity through the means I mentioned above, we may indeed ride the wave longer and higher, but when we crash that tumble will be catastrophic.

But again, what the Obama Administration is doing here is a complete misdirection. Here we are discussing Austrian and Keynesian schools of thought when the “stimulus” is the product of neither. It is merely the product of one political party not getting their pet projects funded for the last 8 years with a hearty dose of fear-mongering to get it pushed through. After all, you wouldn’t want to actually take time to discuss this, would you? Five-hundred million people will lose their jobs if you do that, you unpatriot.

“It’s like we rounded up all the idiots in the country and put them in one city.”

I laughed for a while on this one. I like how you pointed out the straw man arguments, and so here’s the real question. If govt. spending (fiscal policy) was truly effective, how could we EVER have a recession? We not spend into debt all the time? And if the answer is because there is a negative effect to govt. spending (debt, inflation, stagflation, lack of innovation, etc.), why do it on such a massive scale?

I haven’t looked at the Cato Inst. stuff, but I’m sure they think the same thing.