The basic economic problem that arises because people have unlimited wants but resources are limited."Wants" is another word for demand, and if people have unlimited wants, then aggregate demand is unlimited as well. Much of economics is thus focused on the "Supply Side" or how to produce as much as possible to best satisfy the never completely satiable aggregate demand.
For the steady state, the economist John Maynard Keynes would agree with all of the above. But Keynes believed that:
[P]roblems such as unemployment, for example, ... result from imbalances in demand ... Keynes argued that because there was no guarantee that the goods that individuals produce would be met with demand, unemployment was a natural consequence especially in the instance of an economy undergoing contraction."The solution to such a situation, according to Keynes and his Keynesian followers, is to:
"step in and put under-utilised savings to work through government spending."The Keynesian position has an intuitive appeal, especially to someone who has never studied economics. Such a person might say, "I don't have unlimited wants, I have modest wants to match my modest income, and even if my income went up, I wouldn't increase my consumption to match. Therefore, I can see that lack of demand could always be a problem, and with technological job destruction and off-shoring of some of the remaining jobs, I can see it leading to a catastrophic downward spiral of employment and demand." In other words, "unlimited wants" is not intuitive for most people I've talked to, which makes them highly skeptical of the whole economic enterprise since "unlimited wants" is a premise to the fundamental economic problem of Scarcity.
Once the citizen-voter rejects the "unlimited wants" premise, politicians play to that perspective to get votes, especially because they get additional power because of the government expansion required to "put under-utilised savings to work" via government action. Because the politicians push this, economists who want funding are more than happy to advocate it.
So, whether or not Keynesian economic theory is right or wrong, Might makes it Right.