The polar opposite of the theory of Keynesian economics that the current administration practices as a guideline to operate our country's fiscal policy, is the Austrian policies as preached by Friedrich Hayek, and Milton Friedman. While the Keynesian theory has no success stories, actually it has a dismal failure in both Japan and the attempts of FDR's "New Deal," the Austrian school of thought is what President Ronald Reagan used to correct the failures of the Jimmy Carter administration. Unfortunately before I begin, I have to point out that the Progressive movement in this country has attempted to revise history, and paint FDR as a model of success, despite the admission of his own treasury secretary, Henry Morgenthau, that their policies were a hopeless failure and they were out of hope and ideas. The only saving grace for the whole program was the onset of a war and increased demand in American manufacturing, a fact conveniently painted over by those who tout the same fiscal policy as our current salvation.
We hear a talking point daily from Progressive's in Washington that we need a balanced approach to solve our debt crisis. They have stated the need correctly, yet their implementation is lacking. The balance they seek is a balanced budget, not the balance of raping increased income tax revenues. Our country desperately needs a balanced budget amendment to constrain the spending in Washington. Without such a measure, the balanced wheel government uses to avoid taxation hindering the business community, becomes a debt laden, out of kilter monster, shaking loose our pillars of economic freedom. Milton Friedman said it best," Far from being a balance wheel offsetting other forces making for fluctuations, the federal budget has if anything been itself a major source of disturbance and instability."
Let me continue with his wisdom...
" Because government expenditures are now so large a part of the total economy as a whole, the federal government cannot avoid having significant effects on the economy. The first requisite is therefore that the government mend it's own fences, that it adopt procedures that will lead to reasonable stability in its own flow of expenditures."
In English..... balance the budget.