A big bubble

John Maynard Keynes is one of the most influential people in the economic history of the world. His excellent economic analysis of reparations in the aftermath of World War I and the quantity theory of money revolutionized the economic world. His major policy was that the way to stabilize the economy is to stabilize the price level. The government's central bank must lower interest rates when prices tend to rise and raise interest when prices tend to fall. And finally, his great controversial theory of "the key to a healthy economy was by spending, not saving." (slideshare)
John Maynard Keynes has influenced the world of economy so much, but he is still a great example of evolution. Many of his original works have remained untouched or unmodified today. His ideas have formed the base for endless new economic theories. His principles have been expanded and even criticized. Many of his principles stay true today. Here is one example:

Today, there is a great economic crisis known as the bubble effect. The government, with an effort to improve prospects for home ownership, began making homes increasingly expensive and beyond the economic reach of first-home buyers. This causes a problem once interest rates rise and housing prices fall, many home buyers are stuck in an investment that they cannot afford. However, when this economic bubble "pops", the home owners are left with a house less than what they paid for.
Housing prices peaked in early 2005, but began to decline in 2006 and 2007. The impact not only harms home value, but also mortgage markets, real estates, wall street, foreign banks, overall, a nationwide recession. This drop became so serious that President George W. Bush announced a limited bailout of U.S. housing market for homeowners unable to pay mortgage debts. So, the United States government then allocated over $900 billion dollars to special loans and rescues related to the US housing bubble.

Pretty crazy things going on in the economy these days.

Don't get me started on Healthcare reform. Great idea, but a lot of holes. Talk to me about it if you have questions. :)