Spending Ourselves Out of Recession?

Keynesian economics tells us that expansionary fiscal policy can help kick-start a struggling economy.  Following the Great Recession, the United States and many other countries tried this approach.  Despite your view on the effectiveness of these policies, this visualization tracks the changes in Gross Domestic Production and the changes in total debt within a country.  When a country engages in fiscal stimulus the trend line with move horizontal.  GDP growth is measured by vertical movements.  If a country expanded both simultaneously, a 45 degree line could be drawn.  Notice the vertical drops in Japan’s GDP - these signal a serious economic slowdown that began in the late 1990s in Japan.  Also note the use of expansionary fiscal policy in an attempt to lift Japan out of recession. 

 

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Posted by Andrew Disselkoen on 11/15 at 05:43 PM
  1. I think where most people make a mistake is by getting in way over head with student loans.  Thankfully my daughter was able to find two grants on FindScholarshipMoney.com because otherwise it would have been a public university or a community college for the first two years.  That’s the best way to be smart and minimize your college loans.

    Posted by Barbara Titus  on  05/27  at  08:58 AM
  2. Yup, you are absolutely right, we should always spend ourselves out of recession. You are attracting a lot of visitors and scholars towards this term. Its really a good piece of writing…...

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  3. Well, it’s been over a year since this post was written and with current unemployment at 7%, it looks as if Obama’s stimulus program is finally starting to produce some results for working and middle class Americans. I guess that is the ultimate endorsement for spending your way out of the recession.

    Of course, now we have to deal with a national debt that has more than quadrupled under the Obama administration, so there’s that.

    Posted by Enviro Equipment, Inc.  on  12/13  at  05:45 PM
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