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7: TRUMPONOMICS

alancing the budget is of less concern to
BKeynesians than to Austrians because
Keynesians have embraced the idea of functional
finance. Functional finance is the philosophy of aiming
fiscal policy at achieving potential GDP regardless of
what those policies do to the national debt or anything
else. Austrians favor market forces as opposed to
demand management economics and are more
concerned about the national debt. President Trump’s
economic agenda is Austrian biased.
Austrians believe in Say’s Law, or the law of
markets, which states that aggregate production creates
an equal quantity of aggregate demand. There may be
unemployment at times because of a mismatch between
wants and supplies, leakages, and natural disasters, but
a free market economy will tend toward full
employment.
A good book written on the subject of the
depression of 1921 is The Forgotten Depression, 2014,
by James Grant. Mr. Grant argues that government
addressed the severe downturn in the American

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