[incomingpain]

>hat feels like the wrong lesson. Surely during downturns you want to government to step up spending to stabilise the economy, and to get safe bonds out on the market to compensate for stock market downturn?

Nope. Keynes himself created this idea and then disproved it. There's 1 key factor of why this fails EVERYTIME.

Lets say the downturn was just the uranium mining industry. Government comes in, adds spending to stabilize. Then you ASSUME the government will stop once the issue is over. Nope. Never ever does. Politicians who created the subsidy move on to other issues and those temporary government measures become permanent.

This is a big gap for the difference between theory and practice.

On occasion you'll hear about the need to end corporate welfare. Nobody ever actually does it, but then when that industry bounces back, they are supercharged by free subsidies. Then the next politician is told, you can cut but it's going to cause people to lose jobs. Which is true.

Government should never be in this business to start with.