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Author
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Topic: Economic Arguments for & against increasing govt expenditure in a recession
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Jo
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posted 12/4/09 11:32 AM
Im trying to write the above essay, unfortunately its been a long time since I studied economics...can anyone remind me what micro and macro theories I should use to discuss this topic??
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Econanon
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posted 1/23/10 5:19 PM
Government spending in a recession can help replace reduced consumer spending to a certain extent. However in this recession there is very little fluidity of money due to the banks reluctance to provide loans so the effects are limited and short term. A better solution would have been greatly reduced payroll taxes to give consumers more to spend and a greater ability to borrow. The Government might have had to borrow to replace that revenue but it would have been much more effective. It was kind of silly to spend 787 Billion dollars to create 787 jobs. Our President is s fool though, so I don't expect much.
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