POLS 1090 Lecture Notes - Lecture 2: Government Budget Balance, Aggregate Demand, Government Spending
8 Feb 2015
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Document Summary
Immediate origins in the great depression of the 1930s. Historic collapse of capitalist propoction across all of the major capitalist economies. Out of the crisis, a solution eventually emerged. Solution was based on second world war 1939 1945. Massive war entails steep rise in government spending to find the war effort. Move from a situation of mass unemployment in the 1930s to labor shortages in the war. People could see that government involvement the economy could be turned around quickly. As the war begins to end by 1945, political and economics leaders and elites begin to worry. With the end of massive government spending to support the war effort, the repression conditions of the 1930s would return. Support for keynesianism is reinforced by the rise in popular support for socialism, particularly in western europe u. s. makes close connection between liberal capitalism and democracy. Rise in population of communist parties in western europe.
