Another word for "Keynesian economics" is "spending like a banje." Are we about done with that? Read this WSJ article.

Editor's notes: Keynesian (pronounced "key-nezian") economics have been around since the 1930's. It is a product of the progressive socialist mind and it has taken us so deep into debt that it is difficult to see how we can buy our way out of the mess we have made for ourselves using its principles. More than this, it is an impossible reality. It seeks to manage all the anecdotal affairs of an economy and it cannot do that without Federal regulations and THAT (a growing mountain of regulations) has a stifling effect on the sustainable growth of an economy. Understand that our view of what is "sustainable" has been far too short sighted in terms of a timed analysis. For decades, this approach seemed to be working -- but by the mid-1980's, it was becoming clear that deficit spending had its limitations. Now we know that "limitations" is hardly the right word. Try something with the word "disaster" in its phraseology. California has ruined itself because of such nonsense and now the nation and the world are hard pressed to avoid its consequences. Some will disagree but not the folks at the Wall Street Journal. Obama, the pin-headed academic that he is, believes in Keynesian debt-to-riches management. The rest of the world (i.e. the G-20) is beginning to disagree . -- jds

(WSJ) Today's G-20 meeting has been advertised as a showdown between the U.S. and Europe over more spending "stimulus," and so it is. But the larger story is the end of the neo-Keynesian economic moment, and perhaps the start of a healthier policy turn.

For going on three years, the developed world's economic policy has been dominated by the revival of the old idea that vast amounts of public spending could prevent deflation, cure a recession, and ignite a new era of government-led prosperity. It hasn't turned out that way.

Now the political and fiscal bills are coming due even as the U.S. and European economies are merely muddling along. The Europeans have had enough and want to swear off the sauce, while the Obama Administration wants to keep running a bar tab. So this would seem to be a good time to examine recent policy history and assess the results.

Like many bad ideas, the current Keynesian revival began under George W. Bush. Larry Summers, then a private economist, told Congress that a "timely, targeted and temporary" spending program of $150 billion was urgently needed to boost consumer "demand." Democrats who had retaken Congress adopted the idea—they love an excuse to spend—and the politically tapped-out Mr. Bush went along with $168 billion in spending and one-time tax rebates.

The cash did produce a statistical blip in GDP growth in mid-2008, but it didn't stop the financial panic and second phase of recession. So enter Stimulus II, with Mr. Summers again leading the intellectual charge, this time as President Obama's adviser and this time suggesting upwards of $500 billion. When Congress was done two months later, in February 2009, the amount was $862 billion. A pair of White House economists famously promised that this spending would keep the unemployment rate below 8%. . . READ THE FULL ARTICLE >>>