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Central to all economic growth and stability is the harmony in the joint actions of firms, consumers, and the federal government. Some argue that firms are capable of producing this cohesion by their mere existence, and there is the possibility that stability necessitates an unengaged externality. Due to the modern nature of the consumer’s awareness, the national debt, and the global market’s fluctuations, a self-regulating economy is not a realistic ideal. When the unrelenting demand of the modern consumer is taken into consideration, the market will find that monetarism and its complementary passivism will result in a credit accumulation catastrophe. As constant with historical confirmation and the trend of the European Union, government activism, be it in the favor of supply-side or demand-side, is essential to the maintenance of a market where economic tendencies such as wage-price spiraling and trade wars are commonplace. A competing entity cannot regulate itself collectively; there must be an organizing force with less alternate profit initiative and more long-term oriented economic foresight.
Keynes recognized that the decisions of private management could never absolutely influence the demand in the consumer sector. If consumption is low, the logical following motion of the management of a firm would be to lower prices to increase demand, but the likely result of this would be inadequate production and investment. When this necessity to raise prices with inflation is coupled with unemployment, the resulting stagflation cannot present a demand in the economy. The Great Depression embodied the definition of economic sickness, where circulation of the money supply is discouraged as an inevitable multiplier of stagflation, resulting in the absence of economic activity such as investing. Keynes’ “liquidity trap” can be interpreted as a direct result of intimidation from unreliable, power-engorged firm management that has kept a superior economic...