Keynesian Theory and the New Deal

   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.