If you haven’t seen it yet, Robert Higgs is at his best again on Regime Uncertainty and how Keynesian-based product and income accounts distort measures of economic performance in ways that clearly overstate the role of government in contributing to economic activity and masks the destructive aspects of what government does.
Problems with narrower “policy uncertainty” which can be interpreted as having demand side- Keynesian application:
These commentators suppose that such policy uncertainty harms the recovery because it impedes the public’s reliance on relentless increases in government spending, which they regard along Keynesian lines as a positive contribution to economic growth.
In contrast, I consider regime uncertainly as a form of uncertainty related to the public’s—especially the private investors’—confidence in the future security of private property rights, which can be impaired by future regulatory changes (e.g., Dodd-Frank and Obamacare regulations), court decisions, administrative twists and turns, tax increases in various forms (e.g., Obamacare penalties enforced through the income-tax system), monetary-policy changes that threaten the dollar’s purchasing power and distort the allocation of credit, and personnel changes in the government’s corps of executives, judges, and assorted capos.
If only people could bring themselves to see the government for what, all in all, it is—a force for plunder, waste, and destruction—they might then have the wit to worry less about government spending cutbacks and to worry more about the manifold ways in which the government generates what I call regime uncertainty.
Read the whole commentary here: Government Spending and Regime Uncertainty—a Clarification