Reply #26: Spurring consumption was the wrong policy: investments in the future would have been better

[FarCenter]

The use of short-term consumption stimulating measures would have been an appropriate Keynesian solution if the crises of 2008 had been a recession due to normal business cycle issues.

However, the financial crisis is much more extended than previous recessions, and stimulating consumption in a consumer economy with a high percentage of expenditure on consumption of services has no beneficial long term effects.

A better course of action would have been to increase government spending on investments that would have a pay back to retire the resulting debt in future years.