Keynesian economics is the idea that government spending can be used to stabilize the economy, and stresses the importance of moderate economic growth. According to Keynes, during prosperity governments should reduce spending to avoid inflation and to slow down consumer spending in order to maintain stable growth. During times of prosperity Keynesian theory states that governments should pay off debt, reducing the amount of money lost to interest payments. In Keynesian theory debt from fiscal …
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showed last 75 words of 906 total
…and the Klein government has balanced the budget and paid off most of the debt without raising taxes. Klein's following of Keynesian economics has helped Alberta to have practically no debt, when the NDP overspent during the 1990s in British Columbia, which now pays 30 cents of every tax dollar servicing the debt of over $37 billion. Housing costs 40% less in Alberta than in Ontario and unemployment has been low at 5.1% in 2003, the second lowest in Canada.