Yes, but they do keep people like my ex-husband, who has been unemployed for well over a year despite herculean efforts to find a job, from losing their homes and their ability to put food on the table. For me, that's an important value.

Now take government which is run considerably less well than a charity. Just today, I read in the paper that for WA state ~60% of the budget is payroll and benefits, i.e. overhead. That's 3/5 of every dollar gone to pure entropy, as heat rising from burning money dissipating in the wind. Now I don't know what the overhead value is for the feds, but with them sending stimulus funds to nonexistent congressional districts I am not confident that the overhead+fraud and waste is any better.

Take into account that money comes into government either through taxes (IRS, more overhead) or through debt instruments like treasuries (Fed Reserve, Overhead + long term interest). Once it is filtered through 3 levels of gov't and multiple agencies you are left with perhaps 40-50% of the money (at best) that can go out the door to stimulate anything. In the case of the stimulus, alot of this remainder was transfer payments to plug budgetary gaps and fund things like unemployment extensions which don't in and of themselves fund new private sector growth and investment. Still, if we assume that 1/3 of the money actually went out the door to spur the private economy, then we would need a multiplier of 3 just to break even in an economic sense.

I posit to you that if a gov't investment of $1 can return $3 to the economy, Warren Buffet shouldn't bother with Berkshire Hathaway or the stock market with its measly 10-20% returns. In fact we should all just pay 100% of our incomes to the government so we can cash in on that fabulous return.

We often don't like to be told what to do. But when my doctor overrules what my Internet search has revealed about my symptons, I do what he says.

Helping others is chancy–many people don't like to admit need. And they often view their advisors and helpers with resentment. I learned early on to suck it up; I went to high school in my mother's employer's cast-off clothes. A special memory is the first time I got on the school bus in her last-year's maroon and gray plaid coat.

People who think they are being patronized usually are, but by whom? The leaders who know damn well the health insurance stranglehold on Americans needs to be broken, or the new “populists” who gain power by fueling the resentment?

As loathesome as the bailout was, the economy would have collapsed without it.

The Concise Encyclopedia of Economics.

During the 70s, monetarism reached the peak of its popularity among conservative economists. Today, however, Friedman stands virtually alone among top economists in his belief that it contains any merit.

“A Review of Keynesian Theory”

Of course, Keynesianism has its critics, most of them conservatives who loathe the idea that government could ever play a beneficial role in the economy. One of the first major critics was Milton Friedman. Although he accepted Keynes' definition of recessions, he rejected the cure. Government should butt out of the business of expanding or contracting the money supply, he argued. It should keep the money supply steady, expanding it slightly each year only to allow for the growth of the economy and a few other basic factors. Inflation, unemployment and output would adjust themselves according to market demands. This policy he named monetarism.

Wise Geek:

Since Keynesian economics advocates for the public sector to step in to assist the economy generally, it is a significant departure from popular economic thought which preceded it — laissez-fair capitalism. Laissez-fair capitalism supported the exclusion of the public sector in the market. The belief was that an unfettered market would achieve balance on its own. Proponents of free-market capitalism include the Austrian School of economic thought; one of its earliest founders, Friedrich von Hayek, also lived in England alongside Keynes. The two had a public rivalry for many years because of their opposing thoughts on the role of the state in the economic lives of individuals.

The above two links are separate sites.

Hayek was also a major, very influential, accomplished, and respected economist and economic theorist. There is no evidence in the sites I looked at, however, that he is any more “correct” than Keynes, or that his views have any greater validity or legitimacy. In fact, some of Hayek's economic positions — such as his opposition to progressive taxation — are rooted in political ideology not in economic theory. Additionally, Hayek's opposition to what he called “centralized planning” was based largely on models like the Soviet Union and Nazi Germany — not exactly the kind of mixed economies that John Maynard Keynes advocated.

http://www.google.com/search?hl=en&rlz=1B3GGGL_…

http://www.google.com/search?hl=en&q=What+is+th…
Here are links to the Google searches I ran, so you can examine them more closely and look at even more of them than I mentioned here. As you will see, two of the main opponents of Keynesian theory — Milton Friedman and Friedrich Hayek — opposed Keynesian theory because, ideologically and politically, they hated the idea of government intervention in private business. So point number one is that if you are going to start throwing around the “Oh, this is just political, it has no validity” argument, you will have to agree (if you're reasonable) that leading opponents of Keynesian economics are just as politically motivated. So why don't we drop the weak rhetorical tactic of dismissing an economic theory because it's “political” and actually find evidence to support your argument. I for one don't think these sources support your argument that Keynesian theory is popular but lacks evidence for its legitimacy.

It can't be both.

Yes it can.
Controversial: there are different groups of belief out there.
Widely accepted: There's a dominant group.

Keynesian theory is the most popular, I would say for political reasons, but not because it has the most evidence on its side.

Gotcha, big mama shows her stripes.

Quite the opposite. It is accepted by the vast majority of economists that when people have no money to spend because of widespread job loss and unemployment, somehow money has to get into the system if the recession is to end, and that money has to come from the government.

Widely accepted, yes. Proven, not quite. Keynes got the fame for a specific reason: it gives the government a role to play when things go badly. The government has been playing this bigger than we've ever seen, but the effects have been muted.

Prof, nothing is ever “proven” in economics. Economics is by definition an inexact science. However, deficit spending in a recession (or depression) is not a “controversial theory.” Quite the opposite. It is accepted by the vast majority of economists that when people have no money to spend because of widespread job loss and unemployment, somehow money has to get into the system if the recession is to end, and that money has to come from the government. There really are no credible economists that I know of who believe that cutting taxes and freezing or cutting spending is the way to get out of a recession. Your statement that deficit spending is a “way to smooth over small recessions” but does not work in a large recession makes no sense at all.

As loathesome as the bailout was, the economy would have collapsed without it. Economists widely agree on that. Furthermore, as I understand it, most of the financial entities who received bailout funds under TARP have paid the money back.

TARP was a very small part of the bailout maneuvers that have been desperately attempting to keep the bubbles from popping. It was repaid with other money in order to give big bonuses, not because the banks are stable, and certainly not because they've resumed lending. The “Econ 101″ that requires massive spending in recession is a controversial theory that's popular with governments, not a proven fact. It's an attempt to smooth over small recessions, and I'm betting that it's going to fail painfully this time.

If you don't ever pick up a book or a newspaper, or watch anything on television other than Fox, or go to the library once in a while, do your homework and fact-check the politicians and the media reports every so often, what does outrage count for? Absolutely nothing.

You should know my stance on this by now. There are more than two choices out there. If people keep voting for the lesser of two evils that what they'll get: lesser evil. We've been getting lesser evil for so long that it's accumulating into greater evil. When both parties are unable to address this country's major problems with any meaningful legislation, then they both need to go. And what good is it to be informed if you're just going to hold your nose and vote against your conscience?

Sorry, change for the worse, is still change.

Ask yourself why nothing ever changes.

As loathesome as the bailout was, the economy would have collapsed without it. Economists widely agree on that. Furthermore, as I understand it, most of the financial entities who received bailout funds under TARP have paid the money back.

Deficit spending is absolutely essential in a recession, and in one as severe as the one we're in, yes, massive spending is called for. That's Econ 101. The problem with the stimulus is that it was not massive enough, not that it was too massive. Pres. Obama went over the details of that in the SOTU; I needn't repeat them here. Ditto for Cap & Trade and health care reform. Both of those would create jobs (I don't know exactly how many, but a lot), and health care reform in particular is essential to lowering the deficit.

That's my job, and your job is point out that the Reps Do It Too. (And the birds do it, so don't look up suddenly.)