Macroeconomics 15th Edition by James Gwartney, Richard Stroup, Russell Sobel, David Macpherson

Exercise 4

The following lyrics discuss the appropriateness of the government bailouts in response to the recent financial crisis. Explain why Keynesians generally support these policies while Hayekians do not.
[Hayek] And yet it continues as a justification For bailouts and payoffs by pols with machinations.
You provide them with cover to sell us a free lunch,
Then all that we're left with is debt, and a bunch.
If you're living high on that cheap credit hog Don't look for cure from the hair of the dog.
Let's not repeat what created our troubles.
I want real growth not a series of bubbles.
Stop bailing out losers, let prices work.
If we don't try to steer them they won't go berserk.