Notes
- British economist
- Governments should spend their way out of Depression
- Borrow money to be repaid after economy recovers
- Deficit financing
- Projects should be of value to the country
- Went against Adam Smith's theories
- USA, Japan and Hitler's Germany all use this with success.
Summary
Keynes was an British economist. He went against Adam Smith's theories of having money before spending it. It was bizarre for the country believe in his theories because he was a British economist, not an American. He believed that you have to spend money to make money, thus the government needed to spend it's way out of the Depression. This was called Deficit financing. He believed the the projects that were being conducted in the country should be of value to the country's economy. The States, Japan and Hitler's Germany all buy into this idea and begin working with this idea to improve their economy.
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"The difficulty lies not so much in developing new ideas, but from escaping from old ones"- John Keynes
Subjunctive Question
Would the recession of continued for a longer period of time if Roosevelt hadn't use Keynes theories on economics?