Have Keynesian Economists Been Delt the Perfect Hand?

With the latest news that GDP fell at the annualized rate of 3.8% in the fourth quarter of 2008, Obama and his administration are preaching the urgent need to pass the stimulus package currently before the U.S. Senate. There is however, a great deal of debate as to whether or not this package is heading in the right direction. It is large enough? Should it focus more on spending and less on tax cuts or vice versa? From this article it is plain to see that there are many opinions and some are very contradicting. Economist Debate But contradicting opinions can be helpful in the learning process. The way I see it is if and when this stimulus plan is put into place it may possibly be the perfect situation to truly test Keynesian Fiscal Policy. The question is: Are we willing to take a trillion dollar gamble? If not we could always turn to China and Russia. Vladimir Putin and his Chinese counterpart are publicly critiquing the U.S. macroeconomic policies. Maybe we should ask them for advice.


Spending Plan leaves many unstimulated

http://archive.columbiatribune.com/2009/jan/20090130comm003.aspAccording to article, suppose the value of all that we will produce in 2009, our gross domestic product, totals $14 trillion. There cannot be any disagreement that if Congress spends $4 trillion, of necessity there is only $10 trillion left for us to spend privately. In other words, if Congress is going to spend $4 trillion, it must find a way to get us to spend $4 trillion less. The most open and aboveboard method to force us to spend less privately is to tax us to the tune of $4 trillion.
Another method to force us to spend less privately is to print money and inflate the currency. I think tax and inflate the currency would not good way to do for this problem, because bottom of the income scale people suffer from inflate the currency and tax. I think people who are satisfied or happy with their life, would no problem to pay tax or inflate the currency. Goverment spend money to makes suffer people happy might make money more than they expect.

On the brink of collapse!!....., well, not really.

This article foresees doom for the sliding profits of the oil companies. Well, the profits are falling, but no one is talking about the potential collapse of the big names in global oil. Exxon posted a 33% fourth quarter earning shortage as compared to last year's Q4 earnings. It sounds rough, but I'm sure no one had been fired because the company only made $7.8 Billion in "Revenue-Cost". It is a volatile market for profits in the oil market right now, but when the question is "windfall profits or semi-windfall?", I would say it is safe to live in Texas for the time-being.