Compare And Contrast The Keynesian Model Of Economic And American Economy

Two very important economic policies that point in different directions of fiscal policy include the Keynesian economics and Supply Side economics. They are opposites on the economic policy field and were introduced in the 20th century, but are known for their influence on the economy in the United States both were being used to try and help the economy during the Great Depression.

Neither McCauley nor Kolko mention idealism is essentially what the countries of the west used to govern the ideology of capitalism. Unlike McCauley, Kolko, Lee and Higham point out that capitalism was a driving force behind British and American policy. Britain wanted to guarantee the ability to rebuild it’s economy after defeating Germany whilst the USA loaned money to countries such as Britain through it’s policy of war economy[6].

While the liberal experienced emotional changes amid the 1970s, the Communist agreement experienced reduced rates of development yet not the sorts of amazing economic rebuilding that happened in the West. These improvements in the 1970s suggested the Cold War's determination in the 1980s. Arranged in similar connection, the changes of the liberal world economy during the 1970s uncovered – an in a few ways improved – the relative backwardness of the Soviet Union's charge economy, with final outcomes for the truth of the Communist administration. Universal fiscal change, in this view, encouraged the ideological and geopolitical improvements that would take the Cold War.

1. The American System was Henry Clay’s federal program to build road and canals and to create a national bank. The Adams-Onis Treaty ended the Spanish claims of Oregon.

While political reforms were key in characterizing the era of the “common man”, new economical developments that no longer only favored the wealthy elite were of great importance. The most notable of these economical developments during the Jacksonian Period was the elimination of the Bank of the United States. While this did lead to impaired credit and other complications for the government, it was done so to benefit the general population of America. (Document 1) The elimination of the Bank of the United States gave reassurance to the “common man” that now not only were the rich economically safe, so were they. Even now that land ownership was no longer a requirement to vote, many from the new working class, who could afford it now, due to

During the 1930s. the United States faced one of the greatest economic depressions in history, known as the Great Depression. Since many people essentially manipulated the stock market to their advantage, they eventually got richer. However, on October 29,1929, the stock market crashed since so many people wanted to sell their stocks but so few people wanted to buy these products, which caused prices to collapse. This led up to issues such as banking crisis, where banks who invested so heavily on the stock market lost so much money. In fact, people who deposited money lose everything they had. In addition, factories that has overproduced goods had also lost tons of money since businesses were producing far more goods than people were consuming. All these events that led to the Great Depression. Although Franklin D. Roosevelt came into office in 1933 and released his plans known as the New Deal which were essentially government programs that provided aid to Americans, it did not change the fact that the economy was still largely suffering. Meanwhile, tensions in Europe also increased as European countries were devastated from the hard times occurring in their nation. Following totalitarianism as a political system, many European countries were led by dictators. One of the most important dictator, was German leader Adolph Hitler. Germany, who had lost a lot power and land, after the loss in World War I and the

Capitalist democracy is best described by Harding’s United States campaign slogan for presidency, “Less government in business and more business in government.” (865). United States emerged from the war as the strongest among the allied countries. Their economy sustained as they shifted from production of military supplies to the Allied European countries to creating radios, telephones, and cars as Americans moved from rural living to the city. The roaring twenties began as people started to borrow money for such commodities and investments from banks with little money down. On the other hand, Britain changed its economy from state control during the war back to market capitalism while industry was still a leading role (869). Britain owed a war debt to the United States, which they could only repay if Germany was consistent with paying its reparations. Restructuring of Germany’s debts under the Dawes Plan of 1924, stabilized the international capital markets. Meanwhile, France had suffered devastating human losses and destruction of property during the war (869). With the increase of taxes and continuous reparations paid by Germany, France was able to reconstruct itself by 1929.

From 1929 to 1945, two catastrophes occurred: the Great Depression and World War II. American political leaders established a cause-effect relationship between economic collapse and total war, based on these two events, which defined their policy approach in the post-war period. In the 1930s, American leadership, and most importantly, President Franklin Delano Roosevelt, came to view economic decline, political radicalization, and instability as forming a vicious cycle that led to utter chaos and war. Although FDR did not know the future consequences of the economic fallout, he did know that breaking the cycle was of systemic importance. FDR’s policy platform, known as the New Deal, disregarded the historical wariness for government intervention and boldly connected economic security to freedom. Essentially, he attempted to push the American system to its limit in order to save it. Even with conservative elements constantly attempting to restrain his initiatives, FDR expanded his focus in the latter years of the 1930s to include international affairs as war broke out in Europe, Africa, and Asia. FDR and other government elites openly talked about the responsibility America had to build a new world order.

Famine and unemployment, coupled with the near destruction of the continent’s infrastructure left Europe on the brink of economic collapse and starvation. America began supplying financial aid to Europe immediately after the end of the war, George C. Marshall developed the first piece of foreign policy that would serve to not only assist in the rebuilding of Europe, but also counter the growing communist influence on the continent. “Marshall was convinced the key to restoration of political stability lay in the revitalization of national economies. Further he saw political stability in Western Europe as a key to blunting the advances of communism in that region.” http://marshallfoundation.org/marshall/the-marshall-plan/history-marshall-plan/

The world had faced two main economic problems. The first one was the Great Depression in the early of 20th Century. The second was the recent international financial crisis in 2008. The United States and Europe suffered severely for a long time from the great depression. The great depression was a great step and changed completely the economic policy making and the economic thoughts. It was not only an economic situation bit it was also miserable making, made people more attention and aggressive until they might lose their lives. All the society was frightened from losing money, work and stable. In America the housing market was the main factor of the great depression. A crisis of liquidity appeared in the banks forming a credit crunch. This period was influenced by over extended stock market shortage of water in the south and over trusting. The American government put down some regulations to control the productions which were essential for the war.

Since the beginning of time people have been affected by their income and ability to accumulate wealth. People live their lives spending or saving money based on their own expectations of what the economy might do. For hundreds of years we have studied how the economic decisions of individuals and governments affect the welfare of society as a whole. John Maynard Keynes introduced a new economic theory that emphasized deficit spending to help struggling economies recover. Keynesian economics revolutionized the traditional thinking in the science of economics. His ideas and theories were deemed radical for his time but were later enacted by some of the largest governments in the world including the United States during the Great Depression. President Franklin Roosevelt enacted the New Deal in an attempt to stimulate the economy through government spending. In this paper I will be giving background to the history economics, the Great Depression, the New Deal, the development of Keynesian Economics. This paper will focus on analyzing the following question: In an attempt to address high unemployment and economic contraction, was Roosevelt’s The New Deal efficacious in stimulating the economy and ending the Great Depression?

In June 1947, the United States announced the Marshall Plan, intended to help economic recovery in Europe and thus prevent the spread of Communism in a Europe that was increasingly becoming “a breeding ground of hate”, thus providing a comforting environment for the rise of the Marxist ideology. At first, the Marshall Plan seemed to be a success, with economic aid worth $17 billion being made available to Europe and ensuring the protection of democratic governments in Turkey and Greece. Marshall Aid did help economic recovery in Europe, erasing unemployment and improving living standards greatly. Most Western European nations were happy to accept American aid in order to redevelop their economies. However, Stalin forbade any Eastern European countries from accepting the Plan and setup organizations like the Cominform and Comecon instead, to further tighten Stalin’s grip over Eastern Europe.

Social Sciences consist of many different disciplines and those disciplines can be in conflict (disagreement)

More than half of the aided money went to West Germany, France, and Great Britain. A capitalist's economy was rising in Western Europe and Industrial production rose 200%.

Both the Keynesian and Neoliberal era came into existence as an aftermath of both an economic crisis and a war. Keynesianism came after the Second World War when the then neoclassical economy was in crisis. This crisis brought forth Keynesianism with the underlying disbelief in the self-regulating nature of capitalism. The Keynesian ideology believed in increased state intervention to produce economic stability. This policy rested on four policy prescription; full employment; a social safety net; increased labor rights; and investment policies were to be left to private enterprises. Keynesianism’s subsequent inability to deal with the unexpected inflation caused by two international oil crises and during the period of the