Comparing Keynesian Economics and Supply Side Economic Theories :: Economy

Comparing Keynesian economics and Supply font Economic Theories Two controversial economic policies are Keynesian economics and Supply Side economics. They represent opposite sides of the economic policy spectrum and were introduced at opposite ends of the twentieth century, yet still are the most famous for their effects onthe economy of the United States when they were used. The founder of Keynesian economic theory was John Maynard Keynes. He made many great accomplishments during his time and probably his greatest was what he did for America in its hour of need. During the 1920s, the U.S. experienced a stock market scatter of enormous proportions which crippled the economy for years. Keynesknew that to recover as soon as possible, the establishment had tointervene and put a decrease on taxes along with an change magnitude inspending. By putting more money into the economy and allowingmore Americans to keep what t hey earned, the economy soonrecovered and once again became prosperous. Keynes ideas werevery perfect at the time, and Keynes was called a socialist indisguise. Keynes was not a socialist, he just wanted to make surethat the people had enough money to locate and help the economyalong. As far as stressing extremes, Keynesian economics pushed for a happy medium where output and prices are constant, and there is no redundancy in supply, but also no deficit. Supply Side economics emphasized the supply of goods and services. Supply Side economics supports higher taxes and less government spending to help economy. Unfortunately, the Supply Side theory was applied in excess duringa period in which it was not completely necessary. The Supply Side theory, also known as Reganomics, was initiated during the Regan administration.