“KEYNESIAN THEORY IN PRACTICE AN EVER


TANTALIZING TRAP?” John Maynard Keynes was a leading British economist of the day, who is best known for his last and most important book: “The General Theory of Employment, Interest and Money”.


Keynes advised the government during the First World War and participated in the Versailles peace conference, which ended up extracting punitive reparations from Germany. Frustrated by his inability to change the minds of those in power he positioned   contribution is the reasoning behind the proposition that public spending would add directly to a nation’s  would go to contractors, suppliers, civil servants or welfare recipients. They would in turn spend some of the extra income. In essence it would yield both the primary boost from the direct spending, but also   health.


Since the start of Trump’s presidency he has arguably adopted a Keynesian approach. Although it is terrible practice to judge a president on quarterly or annual  each quarter’s real GDP growth numbers as though  being positive that he is going to achieve a full house.    is government spending, and there has been a very  


 Keynesian economics, a fact that was heavily seen   even during the recession. Discretionary spending   cut and increased defence spending, a strategy employed by his predecessor Ronald Reagan, it is arguably Keynesian. The tax cut added money into the economy, and some of this money has been put to productive use (for example, the hiring of people) although some of it has been spent less productively  those already among the wealthiest in our society).  model to show that tax rebates couldn’t change gross domestic product in the way Keynes thought. If the government taxed people less today, they  so they wouldn’t change their spending patterns. It is Barro’s argument however that ‘Conservatives’     spends it.


18 | ADMISI - The Ghost In The Machine | May/June 2019


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