Beat Kappeler Recommends “Beyond the Keynesian Endpoint: Crushed by Credit and Deceived by Debt – How to Revive the Global Economy” by Tony Crescenzi

Abstract

Demand management by way of additional public spending is obsolete, if private and public debt levels are such that they must be reduced. This deleveraging will pull the marginal propensity to consume into reverse. It will be way below the assumptions of Keynesians and their multiplier. Public spending therefore cannot be increased in order to reduce unemployment and foster growth, even less so as the public debt must be reduced in the first place. Shifting the ills of the private sector to the public sector, as practised after the financial crisis, is not possible any more. There are now overleveraged societies.