Editing Keynesianism (section)

== <span style="color: #FFFFFF;">Understanding</span> ==
Keynesianism is understood through '''Spending''' and '''The Circle'''.

'''1. The Circle of Life (Circular Flow)''':
Keynes saw the economy as a giant plumbing system.
* Your "Spending" is my "Income."
* If you get scared and "Stop spending," I lose my income. If I lose my income, I stop spending, and the "Plumber" loses his income.
* Pretty soon, the whole system "Dries up" even if there is plenty of food and factories. This is a "Depression."

'''2. The Government as the "Spender of Last Resort"''':
When everyone else is afraid, the Government must be "Brave."
* The government should borrow money to build bridges, roads, and schools.
* This puts money in workers' pockets.
* The workers then spend that money at the grocery store. The grocery store owner then buys a car.
* The "Circle" starts moving again. This is the '''Multiplier Effect'''.

'''3. "In the long run, we are all dead"''':
Old economists said: "Don't worry about the Depression; the market will fix itself eventually."
* Keynes famously replied: "In the long run, we are all dead."
* He argued that people need help **now**, and the government shouldn't wait for "Nature" to fix a broken system.

'''The 'Paradox of Thrift'''': The idea that if **everyone** tries to "Save money" at the same time, the whole economy crashes, and everyone ends up "Poorer" than if they had just kept spending. Saving is good for a person, but "Too much saving" is bad for a country.
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