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Vatican bank director warned against Keynesianism

January 31, 2011

Ettore Gotti Tedeschi, director of the Vatican’s bank, warned of the growing influence of the Keynesian economic theory:

“In simple terms, Keynes taught that in times of economic crisis, consumer demand must be stimulated by government investment and an ‘attitude of saving’ must be discouraged, Tedeschi wrote.

He said Keynes’ crisis-averting tactics can be seen in the U.S., where government economic policy has focused on increasing public expenditures – and public debt – in order to stimulate private economic activity, including consumer demand and employment.

In addition, also following Keynesian wisdom, the U.S. is printing more money and has looked at increasing taxes in an effort to generate more public revenues.”

And this is leading to increased government control of the U.S. economy. He also cited a book Where Keynes Went Wrong: And Why World Governments keep creating Inflation, Bubbles and Busts, by Hunter Lewis.

(Thanks to LRC Blog.)

 

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