The basic assumption on the Keynes thing is that we over corrected, we had jumped down to a deflated state that was not warranted by the real shock. Under that assumption, government, by virtue of being fleet-of-foot, can jump in and push economic activity; gaining a better operating point for the economy.
If the basic assumption is untrue, say that we really do suffer a severe resource constraint, then all bets are out the window. We get immediate crowding out as government spending drives up resource usage.
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