The Chapel Hill News recently published my column discussing the flawed theory behind government stimulus as a way to bring the economy out of recession.
The recently-passed federal stimulus package, therefore, will do nothing to
remedy the current situation because simply force-feeding new money into the
economy takes no account of the true reason for these idle resources.
Keynesian-inspired economists and politicians, rather, view idle capital and
labor only in the aggregate. Such simplistic assumptions overlook the complexity
of the myriad structures of production within our economy and the very specific
location, attributes and combinations of capital required to produce goods and
services demanded by consumers.