Bill Gross Has Been Reading Up On Vickrey

The often-very-wrong bond fund manager is a paleo-Keynesian, sounding alot like William Vickrey. So, does the US suffer from a chronic lack of aggregate demand? We constantly hear that we are an overly consumerist people, us Americans. Indeed, we even like to import alot of stuff from abroad. In fact, aren't we always hearing that we consume more than we produce? Doesn't seem like the logic holds up, as Mankiw says. Still, imagine a world of Gross/Vickrey (pun intended) deficits. Government would be recycling a helluva lot of our savings into the economy, but what would they be recycling it into...iPhones? Independent films? Vitrectomies? Starbucks? Zip Cars? Harry Potter books? HDTV? Not likely. Countless things that we choose to consume everyday, and even value so highly as to be obsessive about them, would never land on a government spending priority list in a Vickrey world. Ah, yes, $5 Ethiopian coffee is clearly in the national interest and creates high paying jobs! We'd miss out on alot of innovation, even the very small scale innovation that we seem to love. Except for the most ascetic among us, our lives would be significantly less rich and enjoyable.