Keynesian economics: Krugman explains

When I was young there were two choices: Marx or Keynes.  The falling rate of profit and the general crisis of capitalism yielded its cure: central planning.

Keynes/Roosevelt/Paul Samuelson stood for government intervention when the capital markets froze up.

Then came Milton Friedman and the rise of the free marketeers.  Now they have the upper hand and Keynes's heirs like Paul Krugman are frozen out of the White House  because even though they were right they were politically anathema to the right with whom compromise was necessary.  so Obama and Geithner guessed low on the stimulus needed, ran into a Republican fan when it proved short of being enough, and are now stuck in a major jam.

So what is Keynesian economics about?  HERE is Paul Krugman's Keynes Lecture.  Warning - it's wonkish and it has graphs with xy axes..

Keynesian economics: people still don't get it

Republicans complain that bad government policies lead business to put trillions (yes that much) of cash under the pillow, instead of investing it.  So, they say, we should cut spending so that business will spend.  Well somebody's got to spend it and Keynes demonstrated (and the New Deal and WWII proved) that money is money and if they won't spend it government should.  The United States Treasury is not your household budget.  But as the U.S. hovered in 1937 on the edge of a double dip depression, the public didn't get it.  And they still don't  h/t Paul Krugman