In my AP Economics class, we were assigned to read about Meynard Keynes in a chapter of a book called "New Ideas From Dead Economists." When I first got this book, I thought that this will be a bore, I mean who would want to read about dead economists anyway? Sure I love economics, but reading about people who spent their lives pondering about the worlds economy and how all the different aspects of it works seemed a like a waste of time. However, the book turned out great. These people weren't hard core economists at all. Take Keynes for example, he didn't start as an economics student but as a mathematician. He loved math and arts and was a great supporter of theater. He didn't get interested in economics until he read Marshall's Priciples.
Other economists weren't hard core economics lover as well, or atleast didn't start out to be. Adam Smith, or the "grand-daddy of economics" as my econ teacher would call him, wrote most of his treatise abot economics and the invisible hand when he was bored out of his mind about France. Mill was a utilitarian one minute and a romaticist the next. The lives of these people are actually interesting, partially because the book presented them in a way a high school student wouldn't be bored out of ther mind, and their findings and contribution to the theories of economics have led me to understand some of the more complicated sides of today's issues.
This doesn't discredit my awesome econ teacher who has taught me econ since 10th grade.
Anyway, since the economy is spiralling down to recession, I wonder when the government is going to use the multiplier effect taught by Keynes to decrease pressures and make jobs for everybody? How will the new president handle the recession? Will they take advantage of the weak dollar right now? They can lower the deficit because other countries are buying more; our export are more and our import are less. And when will people start thinking that by pulling away from the economy they are initiating a self-fulfilling prophecy. Becaue they buy less thinking that the economy will plummet the suppliers will start to hold back on production and in turn decrease the GDP!
Anywho, if you want to read more about these economists and their theories, read the book. You will find it worthwhile, I promise. ^ ^
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The whole idea of "supply side" economics has been discredited by "Money" magazine of all things. Although tax cuts DO spur GDP growth, they DO NOT necesarily lead to higher revenues.
The government does you Keynes economy. Most of the world however uses the Chicago School, or the Austrian School. Keynesyian economics has been shown not to work well.
The book sounds worth reading. I think you should check this out, if you are interested in the questions you're asking. http://uhec3334.blogspot.com/2008/01/biases-and-economics.html
I don't exactly know the answers either...I think that if everybody keeps it cool we might be able to hack through the recession. Though it is starting to effect people individually, and that is when things start to spiral. It's hard to say.