Government spending can boost economy from "summary" of The General Theory of Employment, Interest, and Money by John Maynard Keynes
Government spending, in excess of revenue, is a remedy for unemployment and not a cause of inflation. It is, therefore, a justifiable method of financing the cost of relief operations. The effects of the prevailing theory of the classical school of economics have been disastrous. The doctrines of laissez-faire capitalism have led to a general attitude of neglect towards the economic health of nations. The key to economic recovery lies in the hands of the government, which must take on the responsibility of stimulating demand in the economy. By increasing public works and expenditures, the government can create jobs and boost overall economic activity. The multiplier effect of government spending will lead to an increase in income and consumption, further stimulating demand in the economy. C...
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