The dictum that “a little knowledge is a dangerous thing” rings very true in the run-up to the federal budget. Limited understanding of macroeconomics, in particular, has been evident from the mantra that the economy needs sizeable fiscal stimulus in the form of increased government spending to boost aggregate demand.
High school and first-year university students of economics everywhere learn that hiking government spending counters recessions and lowers unemployment, as originally proposed by John Maynard Keynes during The Great Depression of the 1930s.
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