If I had to characterize the essence of the current argument between those who defend Keynesian economics and government interventionism and those who uphold Austrian economics and free market principles made possible by Constitutional limits on government power, I'd say it's the difference between obscurantism and reality.
I watched a few cable news shows yesterday and this morning, and the administration is defending its 800 billion dollar stimulus plan of 2009 against criticism that it didn't work, or didn't work as advertised, or that it actually caused harm. The Left, represented by the likes of Paul Krugman, claims that the stimulus wasn't big enough or focused enough to work. Most Democrats claim it had a positive effect and stopped the downward spiral of the economy. Republicans mostly believe it was wasted, while some in the GOP think it could've been effective had the administration used the money wisely for pracical infrastructure projects. What I heard was obscurantism to create doubt about the effectiveness of the stimulus.
Hardly anyone criticized the stimulus based on economic principles and historical evidence that Keynesianism and interventionism are fatally flawed. One argument I heard over and over is that the stimulus stopped the 800,000 a month job losses that were happening at the time. This is probably the most ridiculous defense of the stimulus. There were maybe two months where job losses were close to 800,000, but this was just companies acting during the same period to trim workers -- if the stimulus never happened, who thinks that 800,000 jobs would've been lost monthly for an extended period? Without the stimulus would all American workers have lost their jobs in a few years? It's so ignorant to make this claim that it boggles my mind when Republican commentators sit around tables listening to this claim, yet none that I saw explained why the claim is completely bogus and silly.
Companies laid off and fired workers when the economy went into a recession caused by previous government interventions, and many companies laid off and fired workers at the same time, so that's what created the few months of high job loss, then the job losses trailed off naturally as companies waited for some sign that government interventions would stop and they'd know once again how to calculate and plan -- they're still waiting in 2014.
It's not that the stimulus was ill-conceived, or that it was too little or too much, or that it was not focused -- the problem is with government stimulus per se. Government stimulus will never work to create sustained economic growth and new wealth. The best that could be said for stimulus in the past was that it could generate a short term burst of economic energy, but only in directions decided on by government planners. Now, government interventions have been so many and so disruptive that companies won't be fooled again. Investors will take advantage of money manipulation to generate profit as the Fed pumps billions into the market, but investors and entrepreneurs will not invest in manufacturing expansion or any type of long term business planning that could create job growth and new wealth as long as government keeps churning the market with centrally planned interventions. Keynesianism and the mixed economy have failed, and no amount of propaganda will change this.