Crowing about debt deal is absurd

Jeffrey Shear, North Las Vegas

Monday, Aug. 8, 2011 | 2:03 a.m.

In the aftermath of the debt-ceiling fiasco, conservative bloggers have begun toasting the Tea Party and crowing how Keynesian economics and any future federal stimulus are dead.

Although I’m not sure who “won” the debate, I am pretty sure who lost — you and I, the United States as a whole, voters’ confidence and, if a recent 10 percent correction in international equity markets is to be believed, investor confidence in sovereign debt and the world economy. And while Congress wrangled over this issue for the better part of three months, nothing much else got done — the economy languished, and so the Tea Party Congress seems also to have raised the unemployment ceiling.

As for the demise of Keynesian economics — like dead poets and deceased economists — supposedly discredited economic theories can come back to haunt you. Immediately following the 2008-09 financial debacle, the United States as a whole did not institute a government spending program that was net stimulative or Keynesian.

Much of President Barack Obama’s stimulus package included poorly conceived tax credits along with grants to states that did save thousands of teaching jobs, for example, but few new jobs were created. As a result, when calculated against the massive government cuts that occurred at the state-local level, the stimulus package was not stimulative. So according to Keynesian theory, a high unemployment rate would be expected under the policies that were implemented. Contrary to GOP pundits, our lack of faith in or lack of adherence to a policy doesn’t discredit that policy.