With the Classic economic theory that was used before the Great Depression, unemployment was not an issue until the economy crashed in 1929, with record high unemployment rates for the next several years. The downfall with the Classic theory is that the government has no influence with this theory it is said that everything will work itself out. That however would not work for Americans at this time so when FDR was elected he used the Keynesian theory to help the US out of the depression. Lucky enough when they tested this theory many factories needed more workers for the war effort boosting employment so the unemployment rates from the 1930’s fell drastically. However, the Supply-side theory will increase employment immediately and not just when we are at war like with the Keynesian theory. With a Supply-side economy, by lowering tax rates …show more content…
With the Classic economic theory many of the downfalls to this theory is that we see a lot of greed from the higher class citizens. The saying “the rich get richer and the poor get poorer” is very true in this type of economy. In the Keynesian economic theory they would increase taxes to try to control inflation which many people in America are barely making ends meet as it is so by increasing taxes this would only increase the amount of people in poverty in America. With that being said for the Supply-side theory, with an increase in employment, and lower taxes the decrease in our poverty level should change drastically for the