Essay on How did economists get it so wrong?

Using the data and your own economic knowledge, assess the case for financing universities mainly through charging fees to their students.

How was expansionary fiscal policy used to get out of the Great Recession? Let’s put this one in the Thought Bubble. Introducing my friend Leo Sabin.

When the Federal government has to find ways to regain any money lost they lean on the expansionary Fiscal policy and the monetary policy to regain money into the economy. Whether, a change in taxes or even government spending. Even to the three major tools of the expansionary monetary policy to focus on. In the first part of this paper, I will discuss the expansionary fiscal policy and how the Federal government was involved and the changes that needed to be made to taxes, government spending. The second part of this paper, I will discuss the monetary policy and the tools the Federal Reserve used when under this policy. The expansionary fiscal policy was out to kick start the economy, and the expansionary monetary policy was out to change interest rate, and influence money supply. When discussing these two policies you have to think about one aspect when will it ever stop? Will a policy always have to be part of the economy to help the government one way or another?

Many compare the instability of the economy of today to the 2008 financial meltdown. According to author Joel Havemann in 2008 the nation documented the economy as the world’s worst dangerous crisis since The Great Depression since 2007. Afterward in 2008 a deep recession encompassed the world (. However, the 2008 crisis is not the same as the same as today.

Many people today would consider the 2008, United States financial crisis a simple “malfunction” or “mistake”, but it was nothing close to that. Contrary to what many believe, renowned economists and financial advisors regarded the financial crisis of 2007 and 2008 to be the most devastating crisis since the Great Depression of the 1930’s. To make matters worse, the decline in the economy expanded nationwide, resulting in the recession of 2007 to 2009 (Brue). David Einhorn, CEO of GreenHorn Capital, even goes as far as to say "What strikes me the most about the recent credit market crisis is how fast the world is trying to go back to business as usual. In my view, the crisis wasn't an accident. We didn't get unlucky. The crisis came

The “Great Recession of 2008" hit The United States and the rest of the world with a force not seen since the Great Depression less than a century ago. December of 2007 saw an unemployment rate of 5.7% as the economy was rolling forward on the back of the high-profiled housing market funded by aggressive loans to consumers with sub-par credit. (National Bureau of Economic Research) This created a proverbial “House of Cards” that fell apart that same month and over the course of two years; the unemployment rate would nearly double as The United States would lose over 8 million jobs according the National Bureau of Economics. The cause of The Great Recession can’t simply be quantified to just one person, agency or company. However, in the broad

From December 2007 to June 2009 the United States economy was confronted with its greatest challenge since the Great Depression. The financial crisis was so great that it was coined the term the Great Recession. Many factors contributed to the collapse of the U.S economy; such as, the financial crisis (2007–08), U.S. subprime mortgage crisis (2007–09), a shrinking Gross Domestic Product (GDP) growth rate and unpresented unemployment rates. A recent (2016) article in the Wall Street Journal entitled “Post-Recession Rethink: Growth Potential Dimmed Before Downturn” examines the economic aftermath of the Great Recession.

The Great recession occurred in America in 2007 when the economy began to decline. The cause of the recession can be contributed to many different sources, but it is clear that the main causes of the recession were deregulation, the “housing bubble”, corruption of “gatekeepers”, derivatives, the strategies of K street markets, and private debt.

The fiscal policies refer to the way in which the government affects those activities in the economy of a country. The major common fiscal policies that occur in the economy are the government expenditure and the level of taxation and they are usually advocated by the Central Bank of the country. The fiscal policies are a strategy that relates to the monetary policies that are used by the central bank of a country to control level of money supply in the country. The fiscal policies have a lot of influence on the money supply in the economy.

During times of economic recession or uncertainty, the government can enact expansionary fiscal policy to either combat a decline in economic function, or in times of extreme and potentially harmful economic growth, they can instead enact contractionary fiscal policy to reduce economic expansion. Expansionary fiscal policy is used to effect the economy in periods of recession or economic decline, through decreasing the tax rates imposed on tax sources, and by also increasing government spending on constructive programs and outlays. As a portion of expansionary fiscal policy, decreasing tax rates allows the constituents of the economy to increase their profits and revenue as a smaller portion of their income would be paid into taxes. An increased profitability of businesses and increased income for workers results in greater discretionary consumer and business spending creating a higher demand for normal goods and services along with increased per capita production due to greater profitability of said goods, which is economic growth. Economic recession can also be fought through expansionary fiscal policy by increasing government spending of taxed funds on government outlays. When the government uses taxed funds to increase government spending more goods and

The cause of the Great Recession of 2007 in the United States was very life changing for the people who had to live through it. Multiple things happened in the stock market and other things that triggered this financial meltdown of the Global market.

The President of Bartavia wants to enact expansionary fiscal policy with the intention of manipulating inflation and unemployment. Although Bartavia is nearly employing all of its resources in production and extremely close to full employment level, the President is still concerned about the small percentage that is unemployed. Unemployment is the state of a person without a job or a reliable salary or income. Inflation and unemployment are characteristics that are closely monitored to indicate the economic performance of a country. As the economic advisor to the president, I would strongly advise against implementing this policy. Currently, the economy is not in a recession making the trade-offs associated with economic expansion counter intuitive. In addition, the Phillips Curve demonstrates the inverse relationship between inflation and unemployment, making the need for expansionary action unnecessary right now. Finally, Okun 's Law shows how this policy would effect Bartavia 's GDP via the sacrifice ratio. These three reasons show that the long-run consequences outweigh the short-run benefits of expansionary fiscal policy. Therefore, I implore the President to avoid implementing the expansionary policy.

Overall, Ostrom is critical of Hardin’s approach in dealing with over-exploited common resources such privatization and government regulation. She is critical of the inflexibility of Hardin’s model and its pessimistic outlook for the future (Ostrom et al., 1999). Moreover, it has become evident that common pool resources, such as overfishing, are difficult to address. Ostrom, argues that for the past two decades the approaches taken to address common pool resources, many following Hardin’s model, have not been successful in addressing negative externalities and in some cases have induced further damages (Ostrom,2008). One of the arguments Ostrom would make would be against privatization and government regulation of fisheries. Ostrom, makes clear that privatization of open-access resources is often inefficient (Ostrom et al., 1999).

“The aggregate expenditures line is the summation of consumption expenditures, investment expenditures, government purchases, and net exports. The 45-degree line represents all combinations in which aggregate expenditures equal aggregate output. Keynesian equilibrium is also represented by the saving investment, or injection-leakage, model as the intersection between the injection line (investment expenditures, government purchases, and exports) and the leakage line (saving, taxes, and imports).”(2)

Increased spending on investment adds to aggregate demand and helps to restore normal levels of production and employment.Fiscal policy, on the other hand, can provide an additional tool to combat recessions and is particularly useful when the tools of monetary policy lose their effectiveness. When the government cuts taxes, it increases households’ disposable income, which encourages them to increase spending on consumption. When the government buys goods and services, it adds directly to aggregate demand. Moreover, these fiscal actions can have multiplier effects: Higher aggregate demand leads to higher incomes, which in turn induces additional consumer spending and further increases in aggregate demand.Traditional Keynesian analysis indicates that increases in government purchases are a more potent tool than decreases in taxes. When the government gives a dollar in tax cuts to a household, part of that dollar may be saved rather than spent. The part of the dollar that is saved does not contribute to the aggregate demand for goods and services. By contrast, when the government spends a dollar buying a good or service, that dollar immediately and fully adds to aggregate demand.