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Republican Leadership Endorses Keynesian Stimulus!

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This morning's events included a surprising announcement from GOP leaders who'd met over the weekend to discuss budget strategy.

According to an aide present at the weekend retreat, Rep. Paul Ryan, the powerful chairman of the House Budget Committee, brought a version of John Maynard Keynes treatise, The General Theory... as a joke. "He thought he'd crack Eric and John up, but a funny thing happened when they started flipping through the book," the aide said.

Rep. Eric Cantor confirmed the account. "Paul brought Keynes in there as a goof, of course, but when he started reading passages, we were all inexplicably spellbound. Mitch [McConnell, R, KY -- GOP minority leader in the Senate] came in, saw us all listening intently and asked me if Paul was reading from the Bible. 'He just might be,' I heard myself reply."

Reached for comment last night, Rep. John Boehner confirmed that the weekend turned into a seminar on Keynes. The party leaders even got economics Nobelist and Keynes' defender Paul Krugman to join the retreat on Sunday, for an extended lecture on the macroeconomics of Keynesian stimulus.

"I thought it was probably a trap," said Krugman, who nevertheless quickly flew down to DC and was clearly surprised by his reception. "By the end of the day, they were falling all over themselves to apologize to me for getting this wrong for so long. I really didn't know what to say. I'm still pinching myself."

Rep. Ryan began the day on Capitol Hill by surprising everyone in his caucus by denouncing his own budget, endorsed by the Republican-led House just weeks ago, as "a horribly misguided example of austerity economics" and "a roadmap back to recession."

"Just look at Europe," Ryan announced to the stunned caucus. "Do you want us to become Greece, because that's where all this austerity leads!?"

Then, along with Cantor, Boehner, and McConnell in the Senate, the budget chairman introduced a $1 trillion stimulus measure, fashioned, its authors claimed, after Keynes' 1933 letter to Roosevelt.

Equally stunned Congressional Democrats spent the morning trying to make sense out of the turnabout in Republican policy. "We're glad they're finally thinking about jobs instead of cuts, but a $1 trillion stimulus would blow a hole in the deficit that would be a huge burden to our children and grandchildren," claimed an obviously surprised Sen Reid.

In other news, today is April 1st.

This post originally appeared at Jared Bernstein's On The Economy blog.