“Central banks have moved to stimulate spending in the face of this attempt to increase savings by lowering interest rates. They lowered them to the zero lower bound without having much effect; the fall in desired savings was too large. We are in a Keynesian liquidity trap. Central banks have tried to stimulate spending by actively increasing the money supply, raising fears of inflation in many circles. But no inflation has resulted as the cash sits idle in corporate coffers. Even at zero interest rates, business firms are reluctant to spend!
What to do? Many pundits say we must simply endure what they call secular stagnation. This is an unhappy prediction. Much better is the Keynesian insight that this is the perfect time for fiscal policy. In the U. S. again, there are immediate needs to repair roads and bridges, rebuild the energy grid, and modernize other means of travel. Keynesian fiscal policy expansion will benefit the economy in both the short and long run.”

— Peter Temin

Why Keynes is Important Today (2014)

Adopted from Wikiquote. Last update June 3, 2021. History

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American economist 1937

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“The time has come to speak out. Britain is now locked in a vicious spiralling interest rates…The net result of completing the vicious circle is that prices have increased, the rate of inflation has gone up, the money supply has increased, unemployment has gone up, the rate of bankruptcies has increased, the industrial base has been further eroded, the Government's borrowing requirement has increased and as a result there is more pressure to raise interest rates yet again, to be followed inevitably by the same vicious circle. It is this that must be broken.”

Edward Heath (1916–2005) Prime Minister of the United Kingdom (1970–1974)

Speech to the Federation of Conservative Students in Manchester (6 October 1981), quoted in The Times (7 October 1981), p. 6.
Post-Prime Ministerial

“A key element in all Keynesian models is a ‘trade-off between inflation and real output: the higher is the inflation rate; the higher is output (or equivalently, the lower is the rate of unemployment).”

Robert Lucas Jr. (1937) American economist

"After Keynesian macroeconomics" 1978

“Inflation is an increase in the quantity of money without a corresponding increase in the demand for money, i. e., for cash holdings.”

Ludwig von Mises (1881–1973) austrian economist

The Free Market and Its Enemies, speech to the Foundation for Economic Education https://fee.org/library/books/the-free-market-and-its-enemies/ (1951)

“So: if the chronic inflation undergone by Americans, and in almost every other country, is caused by the continuing creation of new money, and if in each country its governmental "Central Bank" (in the United States, the Federal Reserve) is the sole monopoly source and creator of all money, who then is responsible for the blight of inflation? Who except the very institution that is solely empowered to create money, that is, the Fed (and the Bank of England, and the Bank of Italy, and other central banks) itself?”

Murray N. Rothbard (1926–1995) American economist of the Austrian School, libertarian political theorist, and historian

The Case against the Fed.

“Where countries have been able to carry through on their reform commitments -- as in Korea, Thailand and the Philippines -- results are starting to come in the form of lower interest rates, new investment and increased growth.”

Lawrence H. Summers (1954) Former US Secretary of the Treasury

David Ignatius (April 12, 1999) "Clinton's Capitulation on China", The Washington Post, p. A23.
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“The life cycle of family size, at least in the U. S., has a very humped shape rather similar to that of income, though with a somewhat earlier peak. As a result, one might expect, and generally finds a fairly constant rate of saving in the central age group, but lower saving or even dissaving in the very young or old.”

Franco Modigliani (1918–2003) Italian-American economist

Franco Modigliani, " Life Cycle, Individual Thrift and the Wealth of Nations http://piketty.pse.ens.fr/fichiers/enseig/ecoineg/EcoIneg_fichiers/ModiglianiNobelLecture1985(AER1986).pdf" Lecture to the memory of Alfred Nobel, December 9, 1985, in: Nobel Lectures, Economics 1981-1990, Editor Karl-Göran Mäler, World Scientific Publishing Co., Singapore, 1992.

“Inflation may be defined as any increase in the economy's supply of money not consisting of an increase in the stock of the money metal.”

Murray N. Rothbard book What Has Government Done to Our Money?

What Has Government Done to Our Money? (1980)

“The sentence, 'stopping the printing presses,' is a figurative expression, because it is being done now by creating credit by the Federal Reserve System. But this is government action — all inflation is ultimately the result of activities which government determines and can control. And all inflations have been stopped in the past by the government stopping creating money, or preventing the central bank from creating more money. May I add just one thing? See, all inflations have been stopped by people who created or believed in a very naive form of the Quantity Theory, and acted on that. It may be wrong, but it is the only adequate theory effective to stop an inflation.”

Friedrich Hayek (1899–1992) Austrian and British economist and Nobel Prize for Economics laureate

1975 interview https://mises.org/library/hayek-meets-press-1975 on "Meet the Press."
1960s–1970s

“Question: If you could pick one cause that has gotten us here, what'd you say it is?
Ron Paul: Easy money. The Federal Reserve artificially lowering interest rates, deceiving the people, the investors, the savers, into believing that there's a lot of savings out there, and that we should invest more, build more houses, more cars. It's the malinvestment, which is every bit as dangerous, from the inflation of the money supply, as is the high prices that usually come.”

Ron Paul (1935) American politician and physician

Fox Business Network, March 24, 2009 http://www.youtube.com/watch?v=hkJ1sa9mxCU
2000s, 2006-2009

“Capitalism should not be condemned, since we haven’t had capitalism. A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank. It’s not capitalism when the system is plagued with incomprehensible rules regarding mergers, acquisitions, and stock sales, along with wage controls, price controls, protectionism, corporate subsidies, international management of trade, complex and punishing corporate taxes, privileged government contracts to the military-industrial complex, and a foreign policy controlled by corporate interests and overseas investments. Add to this centralized federal mismanagement of farming, education, medicine, insurance, banking and welfare. This is not capitalism!”

Ron Paul (1935) American politician and physician

Has Capitalism Failed? http://www.house.gov/paul/congrec/congrec2002/cr070902.htm (July 9, 2002).
2000s, 2001-2005

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