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Slack is just another way of describing the manifestation of malinvestment. When we are in an economic decline with broken mechanisms of credit transmission there simply can be no inflation. What Keynesians do not understand is that if the government picks up the "slack" of malinvestment through government spending and paying workers to be unemployed it does nothing to increase produciton. It only moves the waste of malinvestment into the government and makes the taxpayers ultimately pay for the waste.
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