Assignment:
Expansionary or Contractionary
What is the current U.S. Fiscal Policy - is it expansionary or contractionary? If the current GDP has declined or expanded over the past 2 quarters at least, which of the tools of fiscal policy would you use to try to rein in the economy and how is this tool expected to affect Aggregate Demand? Give some examples of past U.S. fiscal policies and comment on their effectiveness. If you were in charge of making changes to U.S. fiscal policy, what changes will you make given the current economic conditions? What are some limitations of fiscal policy? Discuss some other goals besides economic stability that the government may have that would thwart fiscal policy.
Tax Cuts
Do you believe that tax cuts are vital to help revive an economy in recession? Would a one-time tax cut or a permanent tax cut work better? If the US has been on a "consumption binge" for the past few years, would further tax cuts be helpful? Please read this article as you respond to this question:
The Huffington Post: Sow the Seeds of Long Term Growth
The Huffington Post: Obama's Stimulus Package
National Public Radio (NPR): Economists Question Keynes-Inspired Stimulus
Also read:
CBS News: Dear Taxpayer: This Letter Cost You $42M
What are your comments?