What Is Keynesian Economics?
A fun Keynes vs. Hayek video:
https://www.youtube.com/watch?v=d0nERTFo-Sk
… …
Ideas of Keynesianism:
An over-optimism caused boom economy cannot be sustained forever.
Businesses have expanded output too much and the stock market has gone up too high.
Eventually, businesses realize they expanded too much and cut back output, the beginning of a recession.
People lose jobs and have smaller or no incomes, or fear losing jobs, so they spend less, making the recession even worse.
During an economic boom the federal government, to cool down the economy, should:
-tax more, to build up a surplus of funds to be used for increased government spending during recessions
-spend less, to counteract businesses’ too-rapid growth
During an economic recession the federal government, to heat up the economy, should:
-tax less to encourage economic investment and spending
-spend more, drawing down the surplus of funds built up during the boom
…
In the U.S.:
Democrat politicians are mostly Keynesians, pro-increased government involvement in the economy, want to minimize short-term pain.
Republican politicians are mostly “Hayekians,” pro-decreased government involvement in the economy, want to maximize long-term economic gain.
…
Another good video. The presenter talks fast, can add captions and slow down audio at tools on bottom right of screen:
https://www.youtube.com/watch?v=xKGtmzLP8gw
Comments
Post a Comment