Steven Hansen

Confessions of an Austrian Economist

i have never been in one economic camp completely. use the austrians to keep the economy on an even keel, and the keynesians to get us out of downturns.

this recession was caused by america doing it backwards - using the keynesian to keep the economy going. and the house of cards came down. but the excesses are so great, you cannot rely on keynesian economics to get us out because the model never considered these massive excesses.

every mitigating step taken has consequences. okay, i would go as far as keeping the banking system afloat. and, from a logic point of view - the failure of detroit if not cushioned would destroy the economy like a wildfire left to burn. i did not say detroit needed to be saved, but that their deaths made peaceful over time.

the economy needs to be made healthy by working through the excesses. it is too early to be talking about stimulus. the mortgage crisis has not had all the shoes fall yet. the economy has open wounds - they need to heal.

piling on massive debt is illogical at this point. to me stimulus at this point is like throwing gasoline on embers.