Supply Side Keynesianism Essays -- Economics

Supply Side Keynesianism A President is measured by how well the economy did during his term in office. More specifically is whether unemployment went up or down, and did they help the economy to fight inflation. Two basic modes of thought on the subject have pervaded public policy since World War II: demand-side and supply-side economics. Demand-side economics is generally known as Keynesianism, named after the English economist John Maynard Keynes. He believed that governments should force interest rates down by printing money and lending it from the central bank at a discount. This would put more money in consumers' hands and encourage them to spend and consume more, thus creating an incentive for investment. This helped to solve some of the problems, but in the long run it is extremely inflationary, because with the increase of the money supply it becomes devalued. Keynesianism also calls for the government to spend more to try to help the economy grow. Keynesianism is a short-term solution to an economic problem and could only do so much for the economy before inflation caches up with it, and takes it into a recession. On the other hand we have supply side economics, which works on more of a long-term basis. It basically attempts to stimulate economic growth, which would reduce inflation, and raise the standard of living. Supply side proponents say that by reducing government regulations and taxation, this will stimulate more economic growth, and mar...