When the private sector exhausted itself and no longer knew how to handle the 2008 financial crisis, it looked to governments to bail them out. Although much criticised for concentrating on rescuing the perpetrator and not the victims, government responses from London to Washington probably managed to avert an even deeper crisis, and led many observers to declare that Keynes was back. Even in neoliberal Chile, governments realised that they had to spend in bad times, and hoped to recuperate their investment (and cut back on spending) when the situation returned to positive growth.
But now that the bank executives are again making bonuses, it seems there is not need to wait that long. So while unemployment remains high and growth remains weak in the United States, the Republicans have called in their chips, forcing a huge cut in spending before the economic is ready to sustain it. It's only Half Keynes.
The results will be evident. And just in time for 2012.
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