Kenysian Policy Essay

604 Words Dec 17th, 2013 3 Pages
Anthony Sabon
Keynesian Economic Model and Fiscal Policy
In the massive economic crash of 1929, the government did not play such a key role in rebuilding as did in the 50s. With the stock market, and banks going under, people lost their jobs and many were homeless, it was the worst economy the United States has ever seen. The president tried a few tactics and they never really worked, trying to boost consumer spending to create more jobs and boost the economy.

By 1932, the budget was so far out of balance that a revenue bill cut government expenditures and imposed a huge tax increase on the ailing economy. President Hoover authorized the creation of the Reconstruction Finance Corporation, to pump $2 billion in investment money into
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When John Kennedy took office in 1961, unemployment was very high. Even though a recovery from the recession of 1960 had begun, it appeared as though economic expansion might not reach full employment. Kennedy decided on tax cuts to try to stimulate the economy. Various social programs that provide aid and services to families in need of assistance have been created. Most of these programs, food stamps, Aid to Families with Dependent Children, unemployment insurance, were enacted after the Great Depression. By providing families with some income in the worst of times, government not only eases their suffering, but also keeps the economy from grinding to the near total standstill experienced in the 1930s. These government programs are called “automatic stabilizers,” because they absorb some of the impact of a recession without the need for special legislative or executive action. The tax structure also acts as an automatic stabilizer.

Presidents have tried to use government stimulus packages to boost the economy. When Obama was elected, he soon started the “cash for clunkers” program, where people could trade in their old cars and get money for them to help purchase a new car. This program worked and many people took advantage of it. This is turn boosted consumption which helped the economy out of the slump. There are many methods to help boost the economy. Some we have tried in the past that

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