…the potential impact of the cuts is being cited by both parties. Senator John McCain, Republican of Arizona, said the military side alone would eliminate 350,000 jobs directly, and 650,000 more that depend on the government programs.
So, not only is this pure Keynesian analysis, but the Senator is recognizing both the direct and indirect effects of the cuts of jobs. In other words, he’s got a multiplier, and it’s a big one!
I can’t say how long will it be until these guys go back to saying “the government doesn’t create jobs!” but until then we need to add to our working definition of a Keynesian. It used to be ”a Republican in a recession.” Now it’s also “a Republican facing defense cuts.”
Do you think McCain understands this inconsistency (or cares if he does)?