Macroeconomics: The first class on every business student’s checklist. In it, we learn the basic tenants of Economics- supply and demand curves, fiscal policy, what the term “GDP” actually means, and everything that falls in between. Perhaps one of the more important and most interesting lectures I remember was regarding economics’ history, specifically Keynes v. Friedman.

Whether you are fascinated by the business world and the history of economics or not, the theories proposed by Keynes and Friedman are all around you. Their tenants are debated, in some form or another, on Capital Hill every day. The Obama White House, for example, has recently come under a considerable amount of scrutiny from republicans, economists, and even some members of their own party. Why? , monetarist, author, and one of the most influential economists of the last 50 years explained in an interview with CNN’s Shawn Tully.

It’s either all right, or all wrong. This is the premise that Meltzer’s criticism of Obama’s financial decisions rests on. President Obama has frequently noted the thoughts of John Maynard Keynes as the basis of his monetary policies. One of Obama’s favorites: Keynes’s theory on hefty spending in regards to getting out of the recession. However, here in lies the problem for Britan’s famed economist. Obama’s White House is racking up huge debts, but failing to address the second part of Keynes’s model which states that if money is going to be dished out, there must be a plan to take care of it.

When asked what Meltzer believed Keynes’s opinion on the current administrations financial practices would be he responded,

“Keynes’s would roll over in his grave if he knew what was being done in his name…Keynes was opposed to large deficits, he believed they chilled rather than stimulated the economy. Today, deficits are getting bigger…with no plan to lower them. Keynes understood what the current administration doesn’t…that today’s debt increase must be paid in the future.”

Tully then asked one of the most obvious questions a true Keynesian would ask: “Wasn’t it Keynes himself who promoted temporary deficit spending during a recession?” His response, for anyone at all worried about the current administration’s practices was quite alarming. Meltzer said, “Keynes wanted deficits to be cyclical and temporary. He wouldn’t have been in favor of efforts to raise tax rates in a recession to eliminate deficits. He viewed that was suicidal. He…advocated running short term deficits to spur the economy.” Begging the question to even the most poorly informed of readers, “How exactly do the plethora of stimulus and deficits currently being proposed and ran by the Obama administration fit into Keynes plan?” Yet again, Meltzer doesn’t agree with the White House on this point. “ The type of stimulus he [Keynes] advocated was very specific. He said it should be geared towards increasing private investment…as opposed to big government spending as the source of job creation.” Another key point, “ The deficits should be self-liquidating…with higher revenues and lower outlays, the deficit would disappear.”

You don’t have to be an economist (or even a business major) to understand why the administration’s fiscal policies are under fire. Tully notes that you can’t run up a debt without a way to cover it. If the Obama administration is not following in the footsteps of their claimed “Keynesian foundation”, then what path are they following? The image of Keynes rolling over in his grave is not the most comforting to the average American…The bottom line is that Obama’s government has, even by Keynes standards gotten too over-zealous. If we are “redistributing income away from the people and companies who do the investing”, then we have potentially put ourselves in a very compromising situation.

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