00:01
Three of the main practical problems with the keynesian perspective start with the fact that government spending is expensive.
00:20
Here, what we're seeing is that when a government begins to spend money during a recession, it oftentimes has to borrow these funds in order to actually spend that money.
00:29
But that means that the government will eventually have to pay back those funds.
00:32
So in order to do that sometime in the future, the governments will have to either raise taxes or we'll see this experience of inflation.
00:39
And in either case, these two adjustments are going to actually reduce the economy.
00:43
Ability to grow when the recession is over.
00:45
So even though the canadian perspective would argue that we should increase government spending to pull us out of the recession, the fact that government spending is expensive may actually hinder the economy's ability to rebuild itself afterwards.
00:59
The second issue with the canadian perspective is that producers and households may expect this government spending...