Daniel Mitchell at the Cato Institute calls out the silliness of the followers of Great-Depression-era economist John Maynard Keynes. Mitchell shows a chart using data from the Philadelphia branch of the Federal Reserve Bank.
Although it’s not obvious what the graph’s vertical axis represents, still there is value in Mitchell’s interpretation of the chart’s inference, that economists do a particularly…
wretched job. … This does not mean economists are idiots (insert obvious joke here), but it is an additional reason why Keynesianism is misguided. If economists are unable to predict what’s going to happen with the economy in the near future, why should we expect anything positive when politicians tinker with short-run economic performance?
Why should anyone believe that Keynesian “stimulus” such as the $787 billion travesty passed by Democrats last year would do anything other than yank the long-term economy down as a result of the stratospheric debt and confiscatory taxes required for paying down that debt? We should not believe this lie. Democrats don’t really believe it. Vote-buying and future campaign donations are what the stimulus was aimed at.
Mitchell points out:
This doesn’t mean that economists – and others – are never accurate with predictions. But I am quite confident that we will never see an economic model that successfully predicts future economic fluctuations.
That’s a doozie, well worth internalizing and never forgetting.