HISTORY 40C Lecture Notes - Lecture 16: John Maynard Keynes, Keynesian Revolution, Baby Boom
8 Jun 2016
School
Department
Course
Professor
Document Summary
They believed government could stimulate growth of the pie . Governments could strategically intervene in the economy to flatten out cycles of boom and bust cycles. In times of boom, they should tighten spending to curtail bubbles and raise taxes. In times of economic slow-down, they should deficit spend to stimulate economic growth. Properly times, government spending would grow the economy, thus producing more tax revenue. Keynesian revolution made government an active player, not just a bystander, in economy. Became widely accepted and shaped postwar economic policy by boosting government spending. Cold war defense build up: some call it military keynesianism . Large government contracts given to private companies to stimulate growth and was endorsed by both political parties. The super rich were taxed at high rates, which helped pay for this spending and also limited income inequality. The gdp and incomes rose sharply, but there was much debate over whether government was becoming too large or not large enough.
