To revive an economy during a downturn, Keynesian economics requires that government must spend when consumers will not. John Maynard Keynes, who was British, would be disappointed within the current British govt, which is enacting severe cuts in govt spending. Conservatives within the United States are inspired by Britain’s frugality and say the weak United States of America economy is a repudiation of Keynesian economics.
Keynesian economics facts
Keynesian economics is about money. There is a cycle is goes through. Individuals need to spend money for the economy. Everybody benefits when someone spends. The Great Depression was a time when the cycle of money just stopped. The economy got really bad because of this. Making the cycle of money work again was what Keynes told the government to do. He was ridiculed by proponents of laissez-faire capitalism, one of the most popular economic theory of the time. The Roosevelt administration started spending with public work projects building roads and dams in order to take Keynes' ideas to heart. Then World War II came along with massive govt defense spending and the United States economy boomed for 50 years.
Keynesian economics doesn't concern Europe
Europe had lots of deficits in its govt that were seen clearly with the global financial crisis. Timothy Geithner is the U.S. Treasury Secretary. He spoke with European governments and recommended Keynesian economics. Europe decided austerity measures was a better plan. 500,000 jobs could be lost with the military, pensioners, middle class and poor losing out with the $130 billion spending cut. A higher national debt along with less growth and less tax revenue can be what the British governments ends up with, the Guardian accounts Nobel Prize winner Joseph E. Stigliz saying.
Elections under Keynesian economics
A United States economy that remains sluggish despite billions in government stimulus has conservatives arguing the Obama administration should follow Britain’s example. Right wing pundits eagerly anticipating Republican gains in Congress are trumpeting the 2010 midterm election as the official declaration that Keynesian economics have failed. The downturn will finally occur if the government stimulus ends, the White house says. It’s time to get off of deficit spending now that there’s a more stable economy, others argue.
Details from
Wisegeek.com
wisegeek.com/what-is-keynesian-economics.htm
New York Times
nytimes.com/2010/10/21/world/europe/21austerity.html?hp
National Review
nationalreview.com/corner/251088/obamas-economics-are-loaded-bear-j-d-foster
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