“The President’s budget is informed by his belief that government has a strategic role to play in guiding the economy. That means in some cases picking winners and losers and directing capital to individual industries and technologies that have a shot at delivering jobs and economic prosperity. His Republican opponents believe it’s better to let private investors keep more of their money, so they can allocate capital to where they think they’ll get the highest returns.
So this year’s budget debate in many ways harks back to the 1930s intellectual rumble between academic economists John Maynard Keynes and Friedrich Hayek. Democrats take their cues from Keynes, the Depression-era British economist who championed government intervention to correct economic imbalances. Republicans hew to Hayek and his free-market Austrian School of Economics, which views government intrusion into an economy as counterproductive at best, outright socialist at worst.” Read more.