Whatever the validity of their arguments, for now the anti-Keynesians have prevailed. Part of the reason is optics: at a time when citizens are cutting back, it looks good to engage in a bit of sympathy rhetoric about Washington “tightening its belt.” On Monday night even House Minority Leader Nancy Pelosi – for so long demonized by the right as the smiling face of big government – released a pro-austerity statement. That’s a clear sign which way the wind is blowing.
Eventually, the near-recession conditions will end, maybe in two years, maybe in ten. And when they do, no matter how long that takes, it will prove that the anti-Keynesians were right!