Abstract

Part historical narrative and part a critique Keynesianism, this chapter argues that the bi-partisan consensus on Keynsian responses to the financial crisis is mistaken. Hunter Lewis illuminates some of the apparent contradictions in Keynes' writings and highlights current policy-makers who echo these logical mistakes. Lewis contends Keynesian policies, especially through low interest rates, may be fostering greater inequality and setting the stage for the next bubble. The focus on near-zero interest rates has done nothing to address the causes of the last crisis. The author concluded that without immediately embarking on saving and investing, rather than borrowing and spending, we will repeat the Victorian vice of debt and face an inevitable crash.

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