David writes: "I asked for evidence that proves Keynesian theory."
In the preface to the German edition of THE GENERAL THEORY which was published after Hitler built the autobahns and put the unemployed to work (before Germany re-armed by the way), Keynes himself argued that the huge spending on public works undertaken by Hitler (actually it was Schacht's policy) had demonstrated the correctness of his analysis --- which in fact was validating the original multiplier article by his student Kahn. Germany recovered from the depression before any other advanced country --- because of that jolt of spending. (Of course re-armament only made that recovery more dramatic.) Later, World War II lifted the rest of the capitalist world out of the Great Depression. The US economy since world war 2 has validated Keynes' general point that as aggregate demand lags, economic growth lags and unemployment creeps upward --- it has taken surges in consumption (post WW II), government spending (the Korean War, the Vietnam War), bubble-induced investment (the late 1990s and the housing bubble) to jolt the economy to faster economic growth after which there are slowdowns (the 1948 recession, the sluggishness of the late 1950s, the emergence of stagnation in the 1970s, the failure of Reagan's tax cutting to stimulate more investment (as a % of GDP) than in the 1970s, -- the very disappointing recoveries from the 1990, 2001 and of course 2007-9 recessions) --- All of these can be seen through the prism of insufficiencies of aggregate demand with interruptions from various surges --- It is also true that Keynes' assertion that cutting wages will not solve a recession is validated by the experience of the US during the Depression. In fact, prices fell so much that real wages actually rose during that decade. Even the recovery to 1937 and the deep recession that followed that supports Keynes -- the Roosevelt budgets produced a recovery which when he cut spending in an effort to balance the budget in 1937 led to a steep decline in output and another spike in unemployment. (which wasn't cured till World War II in Europe stimulated sufficient exports to put the US back on track for a full recovery -- even before the US geared up for war itself.) And the austerity in Europe with the resulting double-dip recessions is further evidence. You've got to be a real true believer to ignore all of that.
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