The second coming of Keynes.(The Week)(John Maynard Keynes)

As the world's economy has entered a dramatic slowdown, an interesting Keynesian revolution has taken shape. Up until recently, there was wide consensus among macroeconomists that activist fiscal policy was inadvisable. Princeton University's Alan Blinder, for example, wrote in 2004 that "virtually every contemporary discussion of stabilization policy by economists --whether it is abstract or concrete, theoretical or practical--is about monetary policy, not fiscal policy." Blinder went on presciently to question this consensus, but even he cautioned against relying too much on spending, stating that "if Congress decides to stimulate economic activity by building more public infrastructure, the natural spend-out rate of such programs will probably be very slow."

President Obama's economists have disputed that consensus. It was recently reported, for example, that Christina Romer, chairwoman of the Council of Economic Advisors, said "aggressive, well-designed fiscal stimulus is critical to reversing this severe decline." The New York Times helpfully added: "The vast majority of the nation's economists agree that one is necessary, and soon."

Statements such as these have been echoed by economists throughout the Obama administration, and by the new director of the Congressional Budget Office, Douglas Elmendorf, in recent congressional testimony. This apparent unanimity has had an enormous ...