Like the founding fathers and good economists espouse: incentives are important, if not omnipotent. Responding to Sarah, it seems to me that Keynes would agree that borrowers and lenders have to be brought together in a certain way in order for the housing market to regain a robustness lost. But isn't that how we got here, the land left of robust (housing markets)? To attack it using my limited knowledge of this subjects vocabulary, the costs did not fall upon the actors! Externalities abound!
In Keynesian fashion, let the government spend! But let's do it in a way that promotes an infrastructure of incentive, not of immobility. I think Keynes gets a little loose with his figures at the beginning. Suggesting that a measure of the value lost of 10% unemployment was the average worker's productivity times the number of unemployed workers assumes the unemployed are no different than the employed. I may like to argue this position (its probably racial discrimination!), but I may also realize it is a little unfair (unemployed person may not be the same as an employed person in terms of productivity while working). I like his mention of the lost value of working and being self supportive. Everything relates to autonomy!
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