Keynesian economics says that to improve the economy, government should increase spending AND/OR cut taxes. Taxes should not be increased during times of severe recession or depression. The massive spending effort of WWII is what brought about US economic recovery not Roosevelt's meager Public Works projects.
Times are very different today. Prior to the Great Depression the average income of workers was around $750 a year and all the wealth was in the hands of the top one percent of Americans. We can't even imagine a world such as this, but we should read and learn.
Wealth is distributed very differently than just a short century ago. There's a lot of cash being held by big business. Perhaps the "or cut taxes" approach of Keynesian economics needs to be explored before anymore big government spending.
No comments:
Post a Comment