Scott Sumner sums up contemporary stimulus proposals well
...Old hydraulic Keynesianism from the 1960s was already a pretty implausible model. But what's happened since 2009 involves non merely one, but at to the lowest degree 5 novel types of voodoo:
1. The claim that artificial attempts to forcefulness payoff higher volition boost employment, past times boosting AD.
2. The claim that extended unemployment benefits---paying people non to work---will atomic number 82 to to a greater extent than employment, past times boosting AD.
3. The claim that to a greater extent than authorities spending tin genuinely trim down the budget deficit, past times boosting AD together with growth. Note that inward the unproblematic Keynesian model, fifty-fifty alongside no crowding out, monetary offset, etc., this is impossible.
4. More aggregate need volition atomic number 82 to higher productivity. In the quondam Keynesian model, to a greater extent than AD boosted increment past times increasing employment, non productivity.
5. Fiscal stimulus tin boost AD when non at the nada bound, because . . . ?
In all 5 cases at that spot is nearly no theoretical or empirical back upward for the novel voodoo claims, together with lots of prove against. There were 5 attempts to force payoff higher inward the 1930s, together with all 5 failed to spur recovery. Job creation sped upward when the extended UI benefits ended at the outset of 2014, reverse to the prediction of Keynesians. The austerity of 2013 failed to ho-hum growth, reverse to the predictions of Keynesians. United Kingdom of Great Britain together with Northern Ireland had mayhap the biggest budget deficits of whatsoever major economic scheme during the Great Recession, undertaking increment has been robust, together with soundless productivity is forthwith genuinely lower than inward the fourth quarter of 2007.
