The point is that recessions are not caused by a lack of demand. They are caused by people making the wrong things (i.e. destroying wealth). We know they are because enterprises make losses and sometimes go bust. Recessions end when people start making the right things. All that money printing does is keep people making the wrong things. All that state spending does is encourage people to make even wronger things.
- Patrick Crozier comments, in a discussion sparked by his own posting about Keynes for the Cobden Centre, here.
I am finding the many jokes I hear about people going out shopping and thereby “rescuing the economy” less and less funny, and more and more stupid and tragic. These jokers seem really to think that this is how it works.