"The usual response to an economic downturn, cutting interest rates, isn’t working. Large-scale government aid looks like the only way to end the economic nosedive."And
"As in the United States, monetary policy — cutting interest rates in an effort to perk up the economy — is rapidly reaching its limit. That leaves, as the only way to avert the worst slump since the Great Depression, the aggressive use of fiscal policy: increasing spending or cutting taxes to boost demand. Right now everyone sees the need for a large, pan-European fiscal stimulus."Now, I've said this before and will repeat again: Why should we try to avoid a downturn in the economy, and how would that even be possible? Why should we try to put the air back in the bubble? It was a bubble!
I hope someone will some day explain me why. Because even Nobel prize winning economists don't seem to make a bit of sense.
Lasse Enersen:
Adele Enersen:
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a little late. my view as a future MBA, studying economics so this is just my opinion. here goes...
the government should be doing more to create demand, fueling companies and people to invest and consume more, unemployment must go down before any sustainable recovery is labeled. people are needed to fuel the economy and get the national income up. those people spend money, which triggers firms and companies to produce goods and services. if lots of people do not have jobs, they can't consume goods and firms will cut production, lay off workers, slowing the economy even more in a downward spiral.
classic economists think we can get out of this on our own. keynesians think we probably will but it will take a long time and be painful for millions of people. why not boost the economy while we can. spend to get a return in the future. when the economy recovers, decrease gov't spending and raise taxes to cover the debt.
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