John Maynard Keynes Today, Essay Example

It would seem amusing if it were not so sad. That would be a personal opinion on how John Maynard Keynes would react to today’s economic situation. His first response would probably be, “I told you so”, and afterwards he would most likely think how foolish everyone was to have committed the same mistakes. The only difference is that in today’s case the cause of the world financial crisis became government-sponsored enterprises Fannie Mae and Freddie Mac, responsible for issuing risky mortgages to people who would not even pay them out. Thus, the result is yet another historical financial soap-bubble that popped, making policymakers worldwide turn back to the stimulus steps and reforms that were made more than a decade ago.

As John Maynard Keynes recommended before in times of the Great Depression and the post World War II period, he would likewise recommend today, but only with a few modifications. The US government ahead with president Barack Obama has verified the Wall Street bill, which engages greater control over the financial sector. This bill is very similar in its sense to the bills brought out by the US government in the 1930s, after a crisis developed as a result to the stock market crash. In today’s situation John Maynard Keynes will take into consideration the effects of globalization, and the appearance of new types of problems, for example ecological and modern terrorist wars. John Maynard Keynes will most likely support the government subsidiaries and the credit policies of the IMF and World Bank. Consumer expenditures have immensely dropped because of the credit losses, and in order to raise the economy, world governments must raise the purchasing power of its citizens. Individual households are the foundation of any economy, thus the government had to maintain control over enterprises so that they would not abuse their rights. John Maynard Keynes 70 years ago claimed that an economy cannot function properly in complete freedom, governments are required to maintain the rights of all consumers and control the rightfulness of entrepreneur activities.