CalPundit explains why we're all Keynesians now. So, read it so you can stop looking so foolish when you equate "Keynesianism" and "liberalism" or "big government."
And, we're on economics the other thing which has been bugging me lately is the rather misguided arguments about why giving, say, corporate tax breaks would spur new investment. The arugments inevitably go something like this:
Righty: Spurring investment will be good for the economy!
Lefty: Why would firms who are operating below capacity and can't sell enough now want to invest in new capacity?
Righty: Because the money that they spend hiring workers will increase demand for their goods because the workers will have more money to spend!
Here is where Righty confuses microeconomic incentives and more macroeconomic outcomes. It is true that if all the firms in the economy responded to a tax incentive on new investment by actually engaging in new investment this could indeed have a stimulative effect. However, firms aren't going to build that second factory due to their expectations that doing so will have a stimulative impact on the economy as a whole and that therefore business will pick up later
