@sirkokonfaes I appreciate your point of view.
Not necessarily. it also means a government that is limited in what it can do.
I am a strong believer in Kensyian Economics even if I can never spell it right. What Kensyian Economics says is during good times Government shrinks, raises taxes and prepares for the bad times.
During bad times Government cuts taxes and expands rapidly, employing people who lost their jobs because the private sector is cutting back, Government spends on projects, doesn’t even matter what they are, this spending puts money in the hands of people who need necessities and will spend this money directly into the economy which will produce consumption, demand , and JOBS.
Then when the economy returns to normalcy Government shrinks again to step #1 above and the cycle repeats.
We are very good at the expanding and spending part but we are terrible at the shrinking part.
I am also a big supporter of a strong central bank and using all levers of monetary and tax policy to modulate the economy and direct spending where it will do the most good as opposed to just letting markets operate freely.
In these ways we can reduce the wild swings in cycles so that down times are shorter and not as deep and up times last longer and when we do come down it is softer.
Our mistake is blaming the model for our failure when we are not following it to begin with.