The idea is still, nonetheless, ridiculous. So I was happy to see an article by Senate candidate Peter Schiff lampooning the idea of war being good for an economy (and stimulus in general) in his latest column Why Not Have Another World War. World War is key because obviously the two wars we’re fighting now “are simply too small.”

There aren’t a lot of debates between Austrian and Keynesian economists out there unfortunately, but I was able to dig one up. Here Lord Robert Skidelsky, author of Keynes: The Return of the Master and Russ Roberts, the host of Econtalk and the guy behind the Keynes/Hayek rap video. Here they debate the roots of the current financial crisis. For the entire debate, see here.

OK, so this is the epitome of economic nerdiness, but admittedly I love it. John Maynard Keynes and F.A. Hayek come back to life to debate whether Keynesian or Austrian economics explain the economy, the only way they know how; rap-off:

Here’s the problem: the United States has lost approximately 3.3 million jobs since the stimulus package was passed. Unemployment has risen from 7.6% to over 10%. Furthermore, if you include people who are underemployed (working part-time even though they’d prefer to work full-time) or have simply given up on finding a job, unemployment is closer to 20%. So how, exactly, does Obama know he’s saved 640,000 or a million jobs or whatever it is? The exact methodology is difficult to ascertain, but the best explanation I can come up with is an extremely creative imagination.

Dan Mitchell of the Cato Institute gives a concise breakdown on why too much government spending can hurt the economy. It’s definitely worth watching:

Statistics are often seen as infallible, though. Unfortunately, the truth is statistics are often very difficult to gather and compute in a methodologically sound way. Furthermore, there are a host of reasons a particular group may want to fudge these numbers. If anything, I hope this series will shine some light on how statistics can be flawed, and perhaps raise some healthy skepticism.

Can anyone site one credible example where Keynesian economics and budget deficit spending effectively created economic growth?

Widely hailed as good news, housing starts increased 17.2% in May to annual adjusted rate of 532,000. This certainly means the real estate market and thus the economy are heading back in the right direction. Not so fast there slick. Unfortunately, at the beginning of the 2009, according to Bloomberg, there were 19 million vacant houses in the United States!

War is horrible… but it’s good for the economy. I cannot, for the life of me, think of a more dangerous myth than that. This facade has become so prevalent in the national conscience that it’s simply taken for granted… Seriously though, why would anyone actually believe this without at least a little skepticism? Wars are enormously destructive and shift resources from human needs, to human destruction.