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It is associated with the ideas of the [[British]] economist [[John Maynard Keynes]].  

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]]."<ref>[http://www.thefreemanonline.org/featured/the-great-depression-according-to-milton-friedman/ The Great Depression According to Milton Friedman] </ref>

"Keynes thought there is no self-corrective mechanism (or [[invisible hand]]) in a [[free-market economy]]."<ref name=milton>[http://www.thefreemanonline.org/featured/the-great-depression-according-to-milton-friedman/ The Great Depression According to Milton Friedman] </ref>

 

"An unfettered [[market economy]] results in [[depression (economics)]]s, [so Keynes] recommended that the government engage in massive [[deficit spending]]."<ref name=milton />

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]].

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]].