Finance, Forex and Investments

What does the keynesian economics theory say the central bank should do when it expands the money supply to cr?

What does the keynesian economics theory say the central bank should do when it expands the money supply to create more government spending in the economy sending on what bank loans for consumers/consumer spending to help bring down unemployment or what can anyone explain ? To fight unemployment, the Fed traditionally expands the money supply. This creates more spending in the economy, which creates more jobs. http://www.huppi.com/kangaroo/Keynesianism.htm

Public Comments

1. Thank you for the link, the country is opening it's mind on how to deal with it's economic future.
2. Excellent link, but it addresses only monetary policy. Keynes' General Theory works only when it is combined with its theories about fiscal policy--taxation--and government spending. Apologists for the corporatocracy attempt to justify "conservative" (actually, corporatist) policies, which ensure transfer of resources and wealth from the people to the privileged few by market forces, but only those that benefit the greedy and wealthiest in the market (a control exercised by the largest corporations: banks, oil companies, and other trans-nationals because of extremely low taxes, subsidies, and lack of competition and effective regulation). In fact, these "conservative" theories fail consistently, but Keynesian theories explain them effectively: "The argument conservatives make against government spending—“it has to come from somewhere”—is actually no less true for private investment. If dollar-for-dollar crowding out were true, therefore, it would be just as impossible for private investment to pull the economy out of a recession. This, of course, would be nonsense unless the economy was already at full employment (and an increase in one kind of production would have to come at the expense of some other kind of production). "If the economy were already operating at full capacity—imagine a situation in which all workers are employed, factories are humming with activity 24/7, and no unused resources would be available to expand production if demand increased—the argument that increased government spending could not increase overall economic output might be plausible. But that is manifestly not the current economic situation." (See http://www.dollarsandsense.org/archives/2009/0509reusskeynespartI.html To avoid exposure of their fallacious theories, Corporate America has taken ownership or control of our media, which cannot effectively inform the public of the abuses and schemes of their owners or major advertisers. It also spends heavily on lobbyists, "think tanks" whose conclusions are provided ahead of research, and propaganda intended to cause the American people to fight among each other, blaming those forced onto welfare, those who are of different races and cultures (especially undocumented immigrants), and anyone who challenges their biases and prejudices--lumping the latter into the undefined classifications of "liberal," "socialist," "Marxist," Godless," etc. Calling people concerned about the needy "Godless" is irony taken to the nth degree. The very people labeling those who do not toe their ideological dogmata are in thrall to the anti-Judeo-Christian values of Ayn Rand--the embodiment of Godlessness!