We Keynesians do *not* believe in crises of general overproduction. We believe in crises of deficient demand...
Brad DeLong
Just don't share the Keynesian faith that in such a stagnationist state when the rate of effective demand is low and capitalists are gloomy that strongly expansionary fiscal and monetary policies devised by wise men will be sufficient to boost spirits, raise profits and restore full employment in a humane fashion.
At any rate, what do you think are the more important forces pushing the economy into a state of deficient demand today (if you are busy, citations will suffice)?
Joan Robinson puts underconsumptionism at the center: "The maldistribution of income restricts consumption, and so increases the rate of investment required to maintain prosperity, while at the same time it narrows the field of profitable investment, by restricting the demand for the consumption goods which capital can produce."
Others seem to focus on a deficiency of investment demand. The emphasis here is first and foremost on the incentive to buy new pieces of capital equipment which becomes too weak for various reasons to absorb the rate of saving out of the normal income; the rate of profit here falls below the market rate set by the banking system.
So there seems to be quite a bit of debate among you Keynesians about how to characterize and explain deficient demand.
Rakesh