Government Intervention in the Economy: Are Monetary and Fiscal Stimulus Policies Possible Tools for Getting an Economy Out of a Recession
Subject Area: Economics
Topic: Deficit Spending
Essential Question: Should the government use instruments of monetary and fiscal stimulus policies to reactivate the economy?
Imagine people living in parks called Bushville’s, lines for soup kitchens that go for blocks, and all across the country kids running away from home travelling on trains searching for your next meal. This is just a taste of what 2009 could have been, but thankfully, the year did not go down this way although it will be remembered for global economic crises and change. For the first time in three decades, the United States was forced to leave its monetarist for m of economy and start to use Keynesian fiscal measures in order to try to revive its economy. Since then, deficit spending has been a newsworthy topic because as of October of last year the world’s economies entered a deep recession that has been described as the worst since the Great Depression of the 1939. Due to the failure of multiple financial institutions, the government was forced to intervene in the economy in the form of fiscal stimulus - deficit spending - and by early 2009, a “$787 billion stimulus plan signed by President Barack Obama” (Pesek) was passed by the senate. Newly elected President Barack Obama’s Chief Councilor of Economic Advisers, Adam Goolsbee said at a senate hearing early January of this year,
I do not believe that over the next two years, we can make major deficit reduction or balancing the budget a goal, I think that would run the risk of repeating one of the mistakes of Herbert Hoover that led us into Depression (Pesek).
Although there is an ongoing argument about the use of deficit spending, it has become clear after several catastrophic economic crises that governments should intervene in the form of both monetary and fiscal stimulus policies, since they are the quickest and most effective ways to jump-start the United States economy during a recession.
Governments around the world must not find
Topic: Deficit Spending
Essential Question: Should the government use instruments of monetary and fiscal stimulus policies to reactivate the economy?
Imagine people living in parks called Bushville’s, lines for soup kitchens that go for blocks, and all across the country kids running away from home travelling on trains searching for your next meal. This is just a taste of what 2009 could have been, but thankfully, the year did not go down this way although it will be remembered for global economic crises and change. For the first time in three decades, the United States was forced to leave its monetarist for m of economy and start to use Keynesian fiscal measures in order to try to revive its economy. Since then, deficit spending has been a newsworthy topic because as of October of last year the world’s economies entered a deep recession that has been described as the worst since the Great Depression of the 1939. Due to the failure of multiple financial institutions, the government was forced to intervene in the economy in the form of fiscal stimulus - deficit spending - and by early 2009, a “$787 billion stimulus plan signed by President Barack Obama” (Pesek) was passed by the senate. Newly elected President Barack Obama’s Chief Councilor of Economic Advisers, Adam Goolsbee said at a senate hearing early January of this year,
I do not believe that over the next two years, we can make major deficit reduction or balancing the budget a goal, I think that would run the risk of repeating one of the mistakes of Herbert Hoover that led us into Depression (Pesek).
Although there is an ongoing argument about the use of deficit spending, it has become clear after several catastrophic economic crises that governments should intervene in the form of both monetary and fiscal stimulus policies, since they are the quickest and most effective ways to jump-start the United States economy during a recession.
Governments around the world must not find