January 4th, 2009

So Keynes, after all?

So Krugman says Keynes was right and what the US (and therefore, to some degree, the world) economy needs is increased government spending, with an emphasis on material goods (e.g. public works) over financial assets. Bruce Bartlett of Forbes agrees, and stresses even more acutely the importance of the spending to avoid merely exchanging one security for another with no net effect.

So, is this part of the Obama plan? Skimming the (rather-marketoid-sounding) statements in Obama's "Economy Agenda", I'm not sure the advice offered by Krugman and Bartlett is a major part of the plan. Can any of you shed some light on this?

Also, wasn't "Keynesianism" disparaged in recent decades? Is this a semi-consensual "comeback"?

Update: Oh, hmm, Wikipedia suggests that both answers would be "yes".