Compare And Contrast The Classical And Keynesian Economic Theory

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Classical and Keynesian economic theories translate directly into American politics and fiscal public policy. There are stark contrasts with the Republican’s belief in the classical economic theory and the Democrat’s position to implement fiscal spending based on the Keynesian approach to economic stimulation. This is evident in the presidencies of Ronald Reagan and Barack Obama. The Keynesian approach to influence economic growth has left our country severely in debt without a sound fiscal vision to pay down the national debt to an acceptable level. Both economic theories have their advantages when the economic markets are struggling, finding a balance to debt management and economic soundness is the key to any nation’s economic policy. The classical economic theory is based on the belief of the laissez-faire mentality that government should have…show more content…
Unfortunately, government policy influences one’s personal finances and economic health. The Bible makes quite clear that we are meant to work and therefore we pay for the things we need with our hard-earned wages. 2 Thessalonians 2:10 says, “For even when we were with you, we used to give you this order: if anyone is not willing to work, then he is not to eat, either” (NASB). This is the natural order of supply and demand. Responsible and rational people only buy what they need and can afford. I believe both theories can be used to the well-being of a nation and per scripture. To ignore the human suffering that was experienced during the depression would have been inhumane. The New Deal used debt to create lasting infrastructure and create segments of the industry that we still have today. When the economy is back on track and unemployment is at acceptable levels, the government needs to then turn its attention to using increased tax revenue to pay down debt rather than creating additional social programs that continue to grow government

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