on Keynes and Laffer

Stock Markets Roiled by Chaotic Italian Politics - Barrons.com

CO wrote:
"...Keynesian economics is spot on and has just been proved by Europe and the UK and other misguided "austerity" worshipers."

Response:


Dear Charles,

I would beg to differ with your Keynesian affirmations. In fact, I would suggest the data show just the opposite.

There is a distinct lag between the behavior one would have expected in terms of an economic rebound and the job creation that has actually taken place.

As for Europe, they are just showing the latter stages of the Keynesian failure - i.e. that high taxes and reliance on government instead of market forces of supply and demand, eventually fun out of other-people's-money.

I'd suggest the evidence of the last few years validates Laffer's position that there is a limit as to how much of productive people's money government can take and that there are downsides (e.g. low sales) when government distorts the prices of goods and services (i.e. VAT rates of 23%).