"Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate .. purge the rotttenness out of the system" Andrew Mellon
The conflict in Keynesian economics is how much failure should be allowed in the market system. Most Keynesian are asking for more stimulus and deficit financing. The government should be used to provide a strong macroeconomic safety net. This will provide the downside protection that will allow for a take-off in the economy. If the economy is not performing well this year, the government needs to provide more help to solve the problem.
The alternative argument is the one articulated by Mellon in the Hoover administration during the Great Depression. Excesses have to be purged to allow for liquidation that will cleanse the financial and economic system. Do not use government to stop this process. Balance the budget or cut the government excesses because we are prolonging the process.
Neither side is right. There as to be a compromise that allows for failure but provides temporary support during the transition. Unfortunately, there is little talk of funding a compromise.
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