Government role decisive for recovery

As government planners and economists in China have agreed that the key to maintaining economic stability in the stormy sea of the global financial crisis lies in the rapid expansion of domestic consumption, they may find it helpful and inspiring to re-read the writings of the late economist John Maynard Keynes.

Credited for helping to save capitalism from itself in the Great Depression, Keynes contended that governments could spend their way out of a recession. In his tome "The General Theory of Employment, Interest and Money" published in 1936 at the height of the depression, Keynes theorized that governments could avert a down spiral by pumping money into the economy.

Keynes' basic idea lost favor in the 1970s when inflation was seen as the biggest threat to economic stability around the world and good governance was defined by budgetary discipline. But the fallout of the credit crisis in the US that is pushing the world into a recession has forced world leaders to take a crash course on lessons of the Great Depression.