High consumer spending leads to business expansion, resulting in greater employment opportunities.
Higher levels of employment create a multiplier effect[2] that further stimulates aggregate demand, leading to greater economic growth.
Instead, they argue increased governmental spending will help to grow the economy by spurring additional employment opportunities.
[4] They cite the lessons of the Great Depression of the 1930s as evidence that increased governmental spending spurs growth.
He argued there is no automatic stabilizing mechanism built into an economy, and that as a result state intervention is necessary to maintain output.