My research into classical economics and Keynesian economics has given me the opportunity to form an opinion on this hotly debated topic in economics. After doing extensive research on this topic, I have determined that Keynesian economics far surpasses that of classical economics in greatness for America. I will begin my article by first addressing my understanding of both economic theories, then compare and contrast both theories, and end my article with my opinions on why I believe Keynesian economics is best for America. Classical economics is a theory that suggests leaving the free market alone without human intervention; equilibrium will be achieved This theory was the first school of thought for economists and one of the major theorists and founders of classical economics was Adam Smith. Smith stated: “In pursuing his own interest, he (man) often promotes the (good) of society more effectually than when he actually intends to promote it. I (Adam Smith) have never known much good done by those who affected to trade for the public good.” (Patil) Classical economic theory presupposes three fundamental ideas: flexible prices, Shay's law and equality between saving and investment. Flexible pricing in classical theory suggests that prices will rise and fall as needed, but this is not always true, due to interference from government agencies, including unions and laws. Smith stated in Wealth of the Nation (1776): “Civil government, so far as it is instituted for the security of property, is really instituted for the defense of the rich against the poor, or of those who possess any property against those who they have none at all." (Patil) Shay's law implies that supply creates its own demand and demand is not based on production or supply. Schenkel 2 The final assumption is that saving will equal investment which will lead to equilibrium; however, classical theorists are realists and know that this will not always happen, so they believe that flexible interest rates will help maintain equilibrium. Keynesian economics was developed and founded by John Maynard Keynes. He believed and wrote in his book “The general theory of employment, interest and money” that it is essential that government plays a vital role in economic stability Keynesian theorists believe that government spending, tax increases or tax breaks are vital to economic success . Keynesian hypotheses include: rigid or inflexible prices, effective demand, and the determinants of saving-investment. Rigid or inflexible prices suggest that wage increases are easier to accept while wage decreases meet resistance; similarly, a manufacturer will raise prices but, when necessary, be reluctant to reduce them.