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                      Keynesian Theory and the New Deal
         The crash of the stock market brought many hard times.
 Franklin D. Roosevelt's New Deal was a way to fix these times. John
 Stuart Mill and John Maynard Keynes were two economists whose economic
 theories greatly influenced and helped Franklin D. Roosevelt devise a
 plan to rescue the United States from the Great Depression it had
 fallen into. John Stuart Mill was a strong believer of expanded
 government, which the New Deal provided. John Maynard Keynes believed
 in supply and demand, which the New Deal used to stabilize the
 economy. Franklin D. Roosevelt's New Deal is the plan that brought the
 U.S. out of the Great Depression. It was sometimes thought to be an
 improvised plan, but was actually very thought out. Roosevelt was not
 afraid to involve the central government in addressing the economic
 problem. The basic plan was to stimulate the economy by creating jobs.
 First Roosevelt tried to help the economy with the National Recovery
 Administration. The NRA spread work and reduced unfair competitive
 practices by cooperation in industry. Eventually the NRA was declared
 unconstitutional. Franklin D. Roosevelt then needed a new plan.
 Keeping the same idea of creating jobs he made many other
 organizations devoted to forming jobs and in turn helping the economy.
 One of those organizations was the Civilian Conservation Corps. This
 corps took men off the streets and paid them to plant forests and
 drain swamps. Another of these organizations was the Public Works
 Administration. This organization employed men to build highways and
 public buildings. These were only some of the organizations dedicated
 to creating jobs. Creating jobs was important because it put money in
 the hands of the consumer. This directly affected the supply and
 demand. The more money they had the more they could spend. This would
 slowly start a chain reaction and bring the economy back to the way it
 was before the depression. By the end of the 1930's this plan had
 lowered unemployment to 17.2%. To make these organizations it was
 going to take money. Roosevelt had to deficit spend, which is when the
 government spends more than their budget in one year, in order to
 obtain this money. Of course these ideas of supply and demand and
 active government didn't just come to him. He was influenced by John
 Maynard Keynes and John Stuart Mill. There philosophies were the basis
 of the New Deal. John Stuart Mill, who began studying economics at age
 13, was one of the most influential political thinkers of the
 mid-Victorian period. He believed in empiricism and utilitarianism.
 Empiricism is the belief that legitimate knowledge comes only from
 experience. Utilitarianism is the belief by which things are judged
 right or wrong. It is judged according to their consequences. In a way
 he was a hypocrite. When the economy was good he believed in
 Laisezz-Faire, which means "hands off." If the economy was bad,
 though, he believed in an extended role of government. This simply
 meant that the government should take part in the economy and try to
 make it better. The New Deal was a very active government plan because
 it had the government working directly to make jobs and fix the
 economy. Mill died in 1873 and would never had a chance to talk to
 Franklin D. Roosevelt. In a press conference Franklin D. Roosevelt
 once said, "I brought down several books by English economists and
 leading American economists, I suppose I must have read different
 articles by fifteen different experts."(Schlesinger, Pg.650) This
 writing indirectly steered Roosevelt towards a plan which expanded the
 role of government. Mill gave Franklin D. Roosevelt the basis of the
 plan, but it needed to be elaborated on. John Maynard Keynes was the
 man to do this. John Maynard Keynes, one of the most influential
 economists of the 20th century. For many years he was an active voice
 in economics. In 1929 he wrote We Can Conquer Unemployment and in 1930
 he wrote his Treatise on Money. Ten years before he died he wrote his
 General Theory of Employment, Interest and Money. Above all he
 believed in supply and demand. This was an indirect way to let the
 economy balance itself. In order for this system to work people needed
 money. This could only be done by creating jobs. Keynes also believed
 that to reduce unemployment the government needed to increase the
 aggregate demand. The aggregate demand is the total amount of goods
 being demanded. The government could do this by creating jobs. These
 jobs would provide people with money to spend on products. The ability
 to pay and the increase desire to spend would increase the demand for
 goods. The demand for goods would rise and the demand for workers
 would rise. This would slowly reduce the unemployment rate and put the
 economy back where it was before the crash of the stock market. In
 Arthur M. Schlesinger Jr.'s book The Politics of Upheaval it's stated
 that Franklin D. Roosevelt and Keynes communicated on several
 occasions such as, letters, English tea meetings, and messages
 delivered via mutual friends. Although Franklin D. Roosevelt never
 publicly embraced Keynes' theories, and at times voiced disagreement
 with parts of his theories, there were many similarities between the
 works of the two men. Franklin D. Roosevelt took these philosophies
 and created the New Deal, which eventually brought the United States
 out of the Great Depression. John Stuart Mill gave Franklin D.
 Roosevelt the idea of an active government and John Maynard Keynes
 showed him how to do it. Although Franklin D. Roosevelt never really
 liked economists it appears that the work of many economists showed up
 in his New Deal. Although Mill did not directly influence FDR his
 philosophies were present in Franklin D. Roosevelt's plan. Also,
 Keynes theories were disagreed on time and time again by FDR, but in
 the end the New Deal was almost a perfect example of Keynes' theories.
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