And why was Joseph able to pull off this miracle? Because Megan McArdle had not yet been born.
When people like Paul Krugman say that almost $900 billion in stimulus didn't work because it wasn't big enough, you have to wonder if an adequate Keynesian stimulus is even possible. Could any government anywhere borrow 15% of GDP or more to spend on temporary measures with the blessing of their citizens? For that matter, would the markets lend the money without ratcheting up interest rates? Can an extra 15% of GDP be spent without showing sharply diminishing returns--meaning that you'd need even more spending to generate the effects you want?
Today Alex Tabarrok looks at the history and concludes that even if Keynesian economics works in theory, Keynesian politics fails in practice--at least in a Democracy....
Can you just imagine McArdle in Ancient Egypt?
Joseph: And now let Pharaoh look for discerning and wise commissioners over the land to take a fifth of the harvest of Egypt during the seven years of abundance, to store up the grain to be kept in the cities for food. This food should be held in reserve for the country, to be used during the seven years of famine that will come upon Egypt, so that the country may not be ruined by the famine.
Pharaoh: Not bad, Joseph, not bad. Let's---
A tiny cough is heard.
Megan McArdle: *Ahem*
Pharaoh: My advisor spoke?
McArdle: Far be it from me to disparage the advice of my esteemed colleague, but could any government anywhere borrow 15% of GDP or more to spend on temporary measures with the blessing of their citizens?
Joseph: Great Pharaoh, if we do not save the grain many peasants will starve 7 years hence.
McArdle: The peasants won't be happy if they get less grain right now, will they? If you take away some of their grain now they'll stop working altogether! I have a papyrus right here that proves that 78% of peasants would rather have real grain now than hypothetical grain in the future.
Joseph: I would like to see that papyrus.
McArdle: It's behind a paywall and you wouldn't understand it anyway, as you have not gone to the University of the North Kingdom and therefore are not a real advisor.
Pharaoh: Advisor McArdle, do you not think that saving grain is a good idea? It will prevent starvation. What part of that plan is in error?
McArdle: Well, while the plan seems to work in theory it will never work in practice because there is no will to save the grain.
Joseph: Pharaoh need only make the decree and the grain will be saved. Nothing keeps us from enacting this plan but the will to do so.
McArdle: Exactly! There is no will to save the grain!
Joseph: But--if the Pharaoh declared the grain to be saved, it will be saved. I understand not this argument from my colleague.
McArdle: Enacting Joseph's solution will prevent us from finding other solutions to this intractable problem.
Joseph: You answered me not.
McArdle: It is theft to take people's grain. They worked hard for that grain and now you're going to take it away from them?
Joseph: The peasants will understand and in time will rejoice at the wisdom and foresight of their Pharaoh when he is able to feed his people in their time of need.
McArdle: Oh, well, if all you care about is being elected Most Popular Pharaoh, then by all means, start a food riot and see how much grain you'll save then.
Pharaoh: My head doth hurt.