HIST 173 Lecture Notes - Lecture 24: Permanent War Economy, Government Spending, Keynesian Economics
Document Summary
The postwar boom and the remaking of america. New institutions created by new deal were crucial. Created a more stable atmosphere for investment and profit-making. Government subsidies to private industry kept economy on track. Continuous job creation and close to full employment produced increasing wages and incomes for everyone the effectiveness of keynesian economic policies. Adoption of monetary and fiscal policies restored public confidence in capitalism. Reviving a slumping economy through lower interest rates, reducing taxes, and increasing government spending. Cooling down an overheated economy through higher interest rates, increasing taxes, and reducing government spending. Government spending would vary according to conditions and sometimes produce deficits. But later growth would wipe out deficits and produce surpluses. Role of government was to stimulate and nurture private sector, not control it. Taxes- highest on the rich- were used to pay for welfare state and public investment that would produce future growth. G. i. bill was important in sparking and sustaining boom.
