ECO 2013 Lecture Notes - Lecture 26: Unintended Consequences, Government Debt
Document Summary
Started our looking at the u. s. debt clock. Limits to using fiscal policy to stabilize the economy: poorly timed fiscal policy just like monetary policy can do more harm. Timing is more difficult as we have learned with fiscal policy. Why was the recession from 2007-2009 so severe: accompanied by a financial crisis-stud shows this link increase severity of recession. Government debt increases: bail outs, deficits due to decrease tax revenues and increase. Did the stimulus package succeed? expenditures: both obama and busch used fiscal policy to address the recession. Tax cuts were actually rebates of what people had already paid billion. Not a permanent change and it was about only about 40% spent it. American recovery and reinvestment act of billion. Net result: gdp increased, employment decreases, debt. We then looked at forbes to see what number we were on the national debt list: impact not as large as expected or promised, we are #16.
