During the recent economic crisis, Presidents George W. Bush and Barack Obama increased government spending by trillions, in order to revive the ailing economy. Their strategy followed the economic theory known as:

During the recent economic crisis, Presidents George W. Bush and Barack Obama increased government spending by trillions to revive the ailing economy. Their strategy followed the economic theory known as Keynesianism.

Their strategy is based on the economic theory known as Keynesian economics. This theory, proposed by British economist John Maynard Keynes during the 1930s, suggests that in times of economic downturn or crisis, government can intervene in the market by increasing public spending, and in some cases by cutting taxes, to boost demand. The rationale behind this is that during a recession, private sector demand typically falls, leading to decreased production, layoffs, and high unemployment. By increasing government spending, the theory posits, aggregate demand can be raised, which in turn should help to jump-start the economy and lead to economic recovery.