Does government spending help mitigate a recession?
During recessions, a government can try to increase employment and stimulate the economy by spending the taxpayer’s money on government projects. This strategy is based on Keynesian economics, famously applied in Franklin Roosevelt’s New Deal in 1937 during the great depression, and now resurging in the wake of the global economic crisis. More liberal minded economists believe that the best way to stimulate the economy is by lowering taxes.
