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Keynesian Economics At The Heart Of 2010 Political Battles
A pillar of Keynesian economics is the concept that govt must step in and stimulate demand during a recession. The current British government thinks otherwise. Austerity measures are being enacted in Britain that would leave John Maynard Keynes dismayed about the leadership of his native land. American conservatives are using the example of Britain and the struggling United States of America economy to declare Keynesian economics dead.
Keynesian economics details
Keynesian economics is depending on the cycle of cash. People need to spend money for the economy. Everyone benefits when somebody spends. During the Great Depression individuals stopped spending, the cycle of money stopped, and the economy tanked. The govt was advised by Keynes. He said making the cycle of cash work again was what ought to be done. He was ridiculed by proponents of laissez-faire capitalism, one of the most popular economic theory of the time. The ideas Keynes came up with were what the Roosevelt administration decided to use. Building roads, dams and other public work projects were done. Then there was lots of government spending within the United States during World War II. This led to a boom in the U.S. economy for 50 years.
Europe will not use Keynesian economics ever
Europe had lots of deficits in its government that were seen clearly with the global financial crisis. U.S. Treasury Secretary Timothy Geithner recommended Keynesian economics to European governments. There was something else Europe had in mind though. The austerity measures begun to take place. A $130 billion spending cut is being done in Britain. This is hurting the military, pensioners, the middle class and poor due to the 500,000 jobs lost. Joseph E. Stigliz is a Nobel Prize winner who spoke with the Guardian about the plan the British government has decided to use. He said that there will turn out to be a higher national debt while tax revenue goes down along with growth.
Midterm elections near Keynesian economics
Many think that the Obama administration ought to start acting like Britain since the United States economy obviously is not doing any better with the govt stimulus. Voting in others besides the incumbents is what many are saying ought to happen in the 2010 midterm elections. This is because Keynesian economics has definitely failed us. The White House cautions that an abrupt end to government economic stimulus will extend the downturn. It's time to get off of deficit spending now that there is a more stable economy, others argue.
Information 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
