Keynesian Economics
From Conservapedia
Keynesian Economics was "the dominant economic paradigm from the 1940s to the 1970s."[1] It is associated with the ideas of the British economist John Maynard Keynes.
"Keynes thought there is no self-corrective mechanism (or invisible hand) in a free-market economy."[2]
"An unfettered market economy results in depression (economics)s, [so Keynes] recommended that the government engage in massive deficit spending."[2]
According to Keynes, economic slumps are the result of too little demand (see also aggregate demand). The government can stimulate demand by cutting taxes and increasing spending even if this results in growing deficits. During times of economic boom the government can increase taxes and/or cut spending. This will reduce the risk of Inflation and also reduce government deficits. Keynesian economics influenced FDR's New Deal programs during the Great Depression.
While Keynes supported government intervention and government programs, he intended that they only be active during poor economic situations, unlike the modern welfare state. Many believe that FDR agreed, though FDR had died before these programs could be repealed.
