Ok, I admit; my familiarity with Keynesian Economics as proposed by the late British economist John Maynard Keynes was very limited until I read the LA TIMES article “Stimulus Dusts Off An Old Theory” by Washington reporter Peter G. Gosselin on Sunday, January 11.
It seems that Keynes argued in the 1930’s that governments could end the Depression by spending heavily to maintain demand for goods and services until frightened consumers and damaged businesses gained the courage to resume buying and selling on their own.
The success was dependent not so much on the amount of money government spent, but how CONVINCINGLY it signaled that the economic game was reviving, and consumers overcame their fears and began spending again. Timing and political atmosphere were key components.
Gosselin goes on the say that for decades conservative economists dismissed Keynes as misguided, but with the speed with which the present economic crisis has developed, what we are witnessing now is the incoming administration embracing FDR, the New Deal and Keynesian economics with a stimulus package beyond anyone’s wildest dreams.
Will it work?
I have a strong conviction that OPTIMISM by all sectors, including Main Street and the Media, will be the key components for success of the stimulus package.
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It is my first to hear (or I should say read) the concept keynesian economics. If what you are telling us is true, then Keynesian economics might be the answer to the global economic crisis we are experiencing right now.
I think it might work, Obama’s election to the presidency has definitely unfolded a form of optimism that might be beneficial to the economy in the long run. Let’s keep our fingers crossed for this then.
Wow, Keynesian Eco… U just gave me an interesting idea to write about! Tnx
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