What the debate on the economy is about exactly…
Keynesians think that the market failed because of lack of regulation in a dynamic innovative environment. Those with Classical inclinations believe that exactly the opposite is true; that it was ill-conceived regulatory initiatives like the concerted push to expand home ownership in America, underwritten by FANNIE MAE and FREDDIE MAC, and facilitated by easy money, that caused a housing bubble and runaway financial asset expansion. The latter was seriously aggravated by a cartel of rating agencies indirectly created by government licensing requirements and operating with serious conflicts of interest.Keynesians think that more government-Fed-financed stimulus is needed, and that higher taxes don’t matter. Those who believe in the market believe that permanent significant tax reductions (comprehensive tax reform) and a commitment to fiscal responsibility at the various levels of government is what is needed. This will entail credibly limiting the power of the Fed as well.
Take your pick…
