Money For Nothing

clipped from www.boston.com Keynes died in 1946, but the Keynesian fallacy - that money for nothing (government spending without increased productivity) can boost the economy - lives on, impervious to the evidence disproving it. To be sure, many economists dismiss it - several hundred of them, including Nobel laureates Edward Prescott, Vernon Smith, and James Buchanan, issued a public statement last week calling it "a triumph of hope over experience to believe that more government spending will help the US today." But experience didn't dissuade 244 House Democrats from passing President Obama's massive spending bill, just as it didn't dissuade President Bush from signing last year's expensive "stimulus" legislation. Six years into FDR's presidency, his Treasury secretary (and close friend) Henry Morgenthau Jr. ruefully acknowledged that the New Deal had proved an economic disaster. "We have tried spending money; we are spending more than we have ever spent before and it does not work,"