Economics: Keynesian Theory

Economic and government systems have a fundamental connection. Essentially each system needs the cooperation of the other in order to operate successfully. The varieties found in both government and economic systems stems from the amount of control or influence each system allows the other to have. Some economic systems advocate complete governmental control, such as a socialist/communist system. While the other end of the spectrum holds the free market and a democratic system of government, where the government has a small and defined sphere of influence in the economy. Somewhere in the middle is Keynesian Economics, advocating a middle ground of government control aimed at increasing employment rates. Sounds great right? Well that depends on how tight of a grip you want your government to have on your economy. 
People that prefer their government to play a limited role in the economy, advocate the free market economy and all that it brings. While distrusting large amounts of government control. 

The blog post," The Business Cycle: Krugman vs. Austrian Economic Theory" by Thomas E. Brewton, displays such a position. Brewton even blames the continued poor economic health on application of Keynesian economics in the US government's economic plan. 

"Stimulus payments to consumers is analogous to dumping frosting onto a cake mix, before the ingredients have been mixed and baked. All elements of the economy, from raw materials, to intermediate goods, to consumer goods, must return to a supply-demand balance before the economy can gain Krugman’s “traction.” That necessarily takes time, because mining companies and other producers of basic raw materials have time scales for increased output and employment that are very different from the time scales of intermediate goods producers and consumer goods manufacturers.

Deficit spending, ballooning Federal debt, and a Fed dumping money, along with the prospect of higher taxes and unknowable impacts of multifarious new regulations, breeds fear among business decision makers that impedes the re-balancing process. In the 1930s, such actions under Herbert Hoover and Franklin Roosevelt prolonged what should have been a two-year recession into twelve years of Depression misery. President Obama’s similar Keynesian policies are repeating the Depression mistakes, giving us a flattened economy, with unemployment projected to remain in the 9% (really 17%) range for several more years."

Krishna's Mercy's blog post "Free Exchange" takes a similar opinion against Keynesian and other similar systems.

" While the free market system certainly makes sense and proves best at allowing the most people the opportunity to advance in a material sense, there have been many who have opposed it. The primary gripe is that there are winners and losers, with the winners being able to amass much wealth at the expense of the losers. In addition, the choices made by the free participants in such a system are not always liked by other groups. In a free market, the participants get what they want, as opposed to what a group of individuals thinks they should want. To alleviate the appearance of this unfairness, various other systems have cropped into existence. In reality, the system described by Friedman and others is a natural one, something that doesn’t have to be implemented or instituted. Any other system, save the free market, is one that is unnatural and prone to many more defects. Systems such as communism, socialism, Keynesian economics, fascism, and others have sought to impose fairness through the force of government. The goal of such systems is quite straightforward: “There are too many ‘have nots’ and not enough ‘haves’. By taking from the wealthy, who can afford to pay their fair share, we can redistribute wealth to those who need it.”"

There are also those that advocate the Keynesian economic theory as the solution to the economic troubles currently faced around the world.

John Maynard Keynes

View more presentations from MaddieWork.

And other people continue to maintain that it is because not enough of Keynes' ideas were used that the world entered and continues to struggle with economic problems.

Finally, there was the European depression of the 1980s, the worst since the depression of the 1930s. The Keynesian explanation is straightforward. Governments, led by the British and German central banks, decided to fight inflation with highly restrictive monetary and fiscal policies. The anti-inflation crusade was strengthened by the European monetary system, which, in effect, spread the stern German monetary policy all over Europe. The new classical school has no comparable explanation. New classicals, and conservative economists in general, argue that European governments interfere more heavily in labor markets (with high unemployment benefits, for example, and restrictions on firing workers). But most of these interferences were in place in the early 1970s, when unemployment was extremely low.

From this blog.

But the real question in all of this is, "How much government do you want?"