I think Keynes was right in assuming that government spending could help pull a sagging economy out of its stuper. Recessions are largly a psychological phenomena. When people tighten their belts and brace for possible layoffs they efectively put the brakes on consumer spending. Why not let the government (in these time) 'grease the skids'?

You know if you think about it, you could (almost) argue that the Bush tax cuts were a form of government spending.

I wonder, is it fair to compare the economic power of a single country, the US, to the 25 member conglomerate of the EU? Seems to me the collective decision making of 25 individual governments would possibly be more of a hinderance to economic growth than how much the union as a whole spends publically.

These were modest reductions compared to Ronald Reagan, and many of them evaporated during Clinton’s second term once a budget surplus materialized and undermined fiscal discipline."

Oh, so that's what happend?

Funny how the article takes a Kenysian twist stating that "the deficit is not the critical variable". No mention of theinterest we pay on the National debt which is running on par with what we used to spend on defense not long ago. It's kinda like ignoring a mountain of credit card debt as long as you can still make the payments.