But Jim you write this as if it follows mechanically from government spending--"This
stimulates private fixed investment, adding onto any multiplier effects. To the extent that private fixed investment rises, fiscal stimulus becomes unneeded." But if you think that one pulls back on public spending too soon, as Obama has in fact done--this is the pump priming fallacy--or perhaps the Keynesian needs to assert that private fixed investment will be stimulated because he is actually anxious about the wrath of the confidence fairies if the government makes a clear commitment to debt-financed spending until pre-crisis levels of employment are restored. LR
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