The General Theory of Employment, Interest and Money

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   When people get scared and suddenly stop spending, the economy can get stuck at a low level, and the government can help by spending itself.

   The General Theory of Employment, Interest and Money · 1936

   In the absence of private spending, public spending can break the spiral of recession.

   If all your neighbors suddenly decide to stop buying anything, shops sell less and lay people off. Those people then spend even less. Keynes showed that at such moments, the government can break this cycle by paying for roads or schools, putting money back into people's pockets.

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