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What does Keynesian Economics say the Government should spend money on to increase Consumer Spending or Consu?
March 4th, 2011 | 
Author: Question by K E: What does Keynesian Economics say the Government should spend money on to increase Consumer Spending or Consu?
What does Keynesian Economics say the Government should spend money on to increase Consumer Spending or Consumer Demand ?
Best answer:
Answer by Sleep Around
The theory does not really go there, but whatever the government buys from companies will result in jobs and people having enough money to buy things.
If you look over where economics falls on YA it is under behavioral science. If consumers start spending we have a good economy. That is all there is to it. What will give you the confidence to spend.
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Infrastructure/Public Works: roads, bridges, schools, libraries, power generation facilities. Get the construction industry back to work. Government does not hire these people directly, it creates projects, hires private contractors who hire the workers. The workers now have money from their employers and can now afford the new appliances, cars, can do the house remodels, eat out on friday night, which has a multiplying effect on the economy.
Keynesian Economics only works in “once in a lifetime” economic crises like the great depression or the current collapse of the international banking system. And in each of these hand full of cases, the conservatives freak out over government spending and pull back causing the economic problem to worsen and last longer and cost more than it should have. US great depression 1930s, German reunification early 1990s, Japan Banking Crisis 2002.
Money, or stimulus, should go directly to those who will most likely spend it on CONSUMER GOODS AND SERVICES. If you can’t figure out who those people are, you should go back to college Economics 101 and start over.