The idea that governments fiscal policy can be used to stabilize the level of output and employment can be attributed to John Maynard Keynes.

John Maynard Keynes was a British economist who is considered one of the most influential economists of the 20th century. He developed the theory of Keynesian economics, which argued for active government intervention in the economy to stabilize output and employment levels.

Keynesian Economics and Fiscal Policy:
- Keynesian economics is based on the premise that markets are not always efficient and can sometimes experience periods of low demand and high unemployment.
- According to Keynes, during times of economic downturns, aggregate demand falls, leading to a decrease in output and employment.
- Keynes argued that in such situations, the government should intervene through fiscal policy to stimulate aggregate demand and stabilize the economy.
- Fiscal policy refers to the use of government spending and taxation to influence the economy.
- Keynes advocated for expansionary fiscal policy during recessions, which involves increasing government spending and/or reducing taxes to boost aggregate demand.
- By increasing government spending, the government can create jobs and provide income to individuals, which in turn leads to increased consumption and investment, thereby stimulating economic growth.
- Similarly, by reducing taxes, individuals and businesses have more disposable income, which they can spend or invest, further stimulating the economy.
- The goal of Keynesian fiscal policy is to increase aggregate demand and bring the economy back to full employment.

Importance of Stabilizing Output and Employment:
- Stabilizing output and employment is crucial for ensuring economic growth and reducing social and economic hardships.
- High levels of unemployment lead to a waste of resources and skills and can have negative social consequences.
- Stabilizing output and employment can also help prevent recessions from turning into prolonged depressions.
- By using fiscal policy to stabilize output and employment, governments can help create a more stable and prosperous economy.

Conclusion:
The idea that governments can use fiscal policy to stabilize the level of output and employment is attributed to John Maynard Keynes. Keynesian economics and the concept of expansionary fiscal policy have been widely used by governments around the world to stimulate economic growth and prevent or mitigate recessions. Stabilizing output and employment is essential for ensuring a stable and prosperous economy.