Here is an article dealing with exactly what we are studying this week, fiscal policy and the Keynesian Multiplier. Read the article and respond to the four discussion questions at the end of it.
Friday, October 23, 2009
The Government Spending Multiplier
Here is an article dealing with exactly what we are studying this week, fiscal policy and the Keynesian Multiplier. Read the article and respond to the four discussion questions at the end of it.
Subscribe to:
Post Comments (Atom)
49 comments:
1. Lower income households tend to spend a higher share of their income.
2. The government borrowing money from private borrowers will increase their interest rates. This is a concern for policy makers because they risk crowding out private investment, which would offset economic expansion.
3. Animal spirits is the Keynesian term for investors' willingness to spend.
4. I think borrowing trillions of dollars is took risky to attempt, and while we should attempt to bring the economy out of the recession with deficit spending, we should also be fiscally responsible and not spend recklessly.
1. The reason that the multiplier for the rich tend to be smaller than the multiplier for the less wealthy is because a product bought at the same price for both would take a bigger percentage of the less wealthier consumer.
2. Government borrowing can drive up interest rates because it will increase investors' willingness to spend. This is a concern because economists’ fears that expansionary fiscal policy financed by government borrowing will drive up interest rates to private borrowers.
3. Animal spirits refers to the investors' willingness to spend. I have never heard this expression before.
4. I think that the government should practice better fiscal responsibility and not borrow trillions of dollars. In the end those trillions of dollars are going to add onto national debt and I don't think that using this method to put everyone back to work will bring us out of the recession.
1. The targeted poorer people spend more of their income
2.Borrowing money from private investors, expansionary fiscal policy by govenment spending will drive up interest rates will cause the crowding out private investment.
3.Keynesian term for willingness to spend.
4.Taking risks is too volatile in this economy especially with taking trillions in the proces, if we practice better fiscal responsiblity we might see more consistent turnout.
1. poorer people tend to spend a higher share of their income.
2. when the government borrows money, there is less for private investors to borrow, therefore, there is less money which then drives up interest rates. this is a concern because if the government overborrows, there will be no private sector to expand.
3. animal spirits is investors' willingness to spend. i have never heard the expression before.
4. have the gov. be more responsible with the money they spend. borrowing is the only way to spend such large amounts or money, and we then have to pay interest on those loans. all-in-all we'll be paying more back than we actually take in after the big spend.
1) Higher income households would not feel as much as a financial relief than lower income households and therefore would be less likely to spend the new useable income and instead would save it.
2) Interest would increase since the government is able to afford higher interest rates, and therefore obtain the loans that other private borrowers could not. The size of the expansionary fiscal policy will in efffect determine the increase of the interest rates, and if its too high, it risks "crowding out" private investors.
3) The investor's willingness to spend. First time hearing it.
4)It's a solid theory, but as with most theories, there are real world factors that slow or prevent the desired results. The size of loan does seem excessive, but I assume that we are in so deep that it hardly a drop inthe bucket. Sad but true. I feel like we've sunk into a habit where if things get worse the solution is to throw money at it, and so far it hasn't been all too effective. Revision and review is needed.
1. Lower income individuals spend a higher percentage of their income compared to wealthier individuals.
2. As the government borrows money, private investors are left with less money to borrow. Because of the fewer amount of funds, interest rates will rise. This is a concern to policy makers because private investors might be crowded-out, off-setting any expansion in output achieved through government spending.
3. Animal spirits refers to an investor’s willingness to spend. I’ve heard of this before, but don’t really remember where.
4. I believe that borrowing all this money will put us deeper into the hole we have dug ourselves into. As we keep borrowing more and more money, we will have to repay that money someday with loads of interest added on. Since our country’s debt is already at 12 trillion, paying that debt off will be an extremely difficult task. The only way to get ourselves out of this rut is to practice better fiscal responsibility.
1. Tax cuts for the rich tend to have a smaller multiplier effect than tax cuts for lower income households because lower income households are more inclined to spend a higher share of their income.
2. Government borrowing can rise drive up interest rates because there will be less money for the private borrowers since the government is taking it. Therefore, the interest rates will go higher. This will "crowd out" the private borrowers, which is major concern because the private distributors will decrease.
3. Animal spirits is the term for investor's willingness to spend. Never heard of this expression before.
4. I think borrowing trillions of dollars will only accumulate the debt that is already too high. The government should practice better fiscal responsibility and use the money more wisely.
1. Lower income households probably tend to spend a larger percentage of their income of necessities, thus they spend a larger potion of their income off the bat.
2. As the government borrows spend more money, interest rates are driven up as lenders want to make more money. Loans to private investors would be crowded out by the government.
3. Investors' propensity to spend. I have heard this term in Mr. Pye's class.
4. Borrowing trillions of dollars seems to be putting too much stock into Keynesian economics, which some still seem to oppose. The government should not try to stray too far into spending as many still raise points as to why one should not spend that much money.
1) When tax cuts occur for lower income households, they will spend more money. Since they spend a much greater percent of their money than do higher income houses, the effect of a tax cut on a lower income household is greater on the economy.
2) When governments borrow money, they are borrowing part of a fixed amount of loanable money, which decreases the amount of loanable money for others to borrow. This increases the demand on a set amount of loanable money, increasing its interest rate. This offsets any growth the nation would have by increased government spending by decreasing private spending due to lack of borrowing.
3) Investor's willingness to spend is what is meant by "animal spirits." This term is new to me.
4) We should attempt to bring the economy out of the recession with deficit spending, but borrowing trillions of dollars isn't going to aleviate the problem. We need to find other ways in fiscal policy to do this.
1. Households with less income are more likely to spend a greater portion of their income. In addition, the multiplier is greater for those who spend than those who save.
2. If the government borrows from private investors, it will drive up interest rates since there will be less money for the investors themselves to use. We must also understand that the government is affecting the money market as well. This is an issue for policy makers since borrowing can lead to high interest rates and the possible crowding out of private investment.
3. The "animal spirits" is the term that describes an investor's willingness to spend. I have not heard this expression before.
4. Although Keynes encouraged deficit spending, I believe it is not a good idea for the government to spend trillions of dollars. The government should practice greater fiscal responsibility rather than taking such a huge risk.
-Stanley Verghese, 7th period
1. Lower income households have a tendancy to spend a higher amount of their income than the rich.
2. When the government borrows more money, it leaves less available for private investors, causing the interest rates to increase. This is a concern for policy makers because private investors could be "crowded-out" by government, which could offset economic expansion.
7th Period
3. Animal spirits refers to an investor's willingness to spend. This my first time hearing the expression.
4. While there are good intentions, borrowing trillions of dollars is too risky and will only lead to more debt in the long run. Practice of better fiscal policy is called for.
1. lower income houses tend to spend more of their income than richer people who have plenty to spend regardless of taxes.
2. borrowing drives up interest rates because the demand for loans go up so they become more expensive. policy makers must be sure that the package isnt too large
3.keynsian term for willingness to spend
4. i think its a bad idea bc it puts a large burden of debt on future generations that had no say in the matter
1. Individuals with a lower income are more inclined to share a higher portion of their income than those who are wealthy.
2. Through expansionary fiscal policy and supply-side economists fear this because it would offset any expansion in output acheived through goverment spending.
3. I've never heard this expression before I believe it refers to investors willingness to spend.
4. I think that the US goverment should practice better fiscal responsibility because continued borrowing is digging us deeper into a hole. The goverment borrows with the intention of spending wisely but this is not always done.
1. As said in the above article, “A tax cut targeted at poorer people may have a bigger impact on spending than one for the affluent, since poorer folk tend to spend a higher share of their income”.
2. Interest rates will eventually go up because there is a massive amount of borrowing by the federal government. This however proves to be a concern to policy makers because it risks the crowding out of private investors.
3. The term “Animal Spirits” is closely associated with John Maynard Keynes who used it in his 1936 book, The General Theory of Employment Interest and Money it refers “to investment demand driven by the whims or “animal spirits” of investors” (Cited from http://www.highbeam.com/doc/1O104-animalspirits.html)
4. No, we are only adding onto that supposedly high ceiling the government raises each time. By attempting to dig ourselves out of the recession we are only further digging a deeper whole. By borrowing money we someday have to pay it all back plus interest loans and in addition what would become of the dollar in the future? What will become of the national debt in the future? We don’t know, a better more improved fiscal policy should be implemented.
Karen Pasay-An >.<
2nd Period
Puba Pye!!!
1. bc lower income households buy the same things but spend more of their income
2. interest rates rise when there is government borrowing bc there's less money for investors to use. it will risk crowding out private investment and deter economic expansion
3. keynesian term; investors' willingness to spend.
i live by this expression
4. borrowing trillions of dollars is not wise, bc that will only increase our debt. we know as much as any other nation that we wont be paying back the money, so the only other option is fiscal responsibility. resurrect keynes if possible. let him make the choices. make him ruler of the world.
peace
Marvin Jacob
PS- http://www.infowars.com/u-s-economy-consumer-confidence-drops-on-unemployment-concern/
1. the households with lower incomes tend to spend more of it.
2. interest rates would increase if the government borrowed from private borrowers. This is a concern to pilicy makers deciding on the size of the fiscal stimulus package because they would have to risk the crowding out effect of private investments.
3. keynesian term for willingness to spend.
4. I think the government should be practicing better fiscal responsibility and stop borrowing trillions of dollars. It is eventaully going to add up and be left for the future generations to pay off.
Sibil Mathew
2nd Period
1. Houses with lower incomes spend more of their incomes than do houses with higher incomes.
2. The government's borrowing money could cause interest rates to rise, forcing out private investors, which is why economists worry about the size of a fiscal stimulus package, because the positive effects could be negated.
3. Animal spirits refers to people's willingness to invest and spend money. I've never heard of it.
4. I think that while deficit spending is an effective way out of a recession, the government might be better off regulating the money more carefully and practicing more fiscal responsibility.
1. Tax cuts for the wealthy have a smaller multiplier effect because households with a smaller income tend to spend a higher percentage of their income.
2. When the government borrows money it is in more demand so the interest rate goes up. Private investors are more willing to invest when interest rates are high and so the government is able to borrow more. Deciding on the fiscal stimulus package is a concern because they risk crowding out private investors.
3. Animal spirits refer to investors willingness to spend. It's a Keynesian term.
4. The US government should be practicing better fiscal responsibility and not be so reckless with money.
Adriane Joseph
2nd period
1. The poor tend to spend a higher share of their income than the wealthy.
2.The government borrowing money will drive up the interest rates of private borrowers and this will "crowd-out" private investment, offsetting economic expansion.
3. Animal spirits is the investors willingness to spend. This is the first time I've seen this term.
4. Due to the fact that the debt of the U.S. is already so high, borrowing trillions of dollars does not seem like a good idea. Even though Keynes encouraged government borrowing, it seems too risky. I believe that the U.S. should be practicing better fiscal responsibility.
Kelsey Schreiber
Period 7
1. Tax cuts for the rich tends to have a smaller multiplier effect that tax cuts from lower income homes because the lower income folks spend more of the money they make.
2. When the government borrows lots of money the private investors have less money to borrow out therefore interest rates go up. This is a concern because if they let the government borrow up too much it'll lead to the downfall of private investment.
3. No, i have never heard of this before. Animal spirits,as refered to in the article,is a reference to consumers willingness to spend.
4. I think this is not the way to help us out of our mess. If we try to buy our way out of it, it will only haunt us later. Trying to buy out of being in debt? That doesn't make much sense.
1. because a product bought for the same price by both a wealthy and poor person would be a diffrent percentage of there income. since the poor person makes less money it has a higher percentage.
2. Government borrowing from private lenders will drive up interest rates. This cause concerns because if it is too large then the government will crowd out private investors.
3. Animal Spirits is a investor's willingness to spend. Heard of it somewhere but can not seem to remember where.
4. I think that borrowing trillions to "jumpstart" the economy further will only do harm to the economy by adding on to our already substantial debt.
1. Because even though their taxex are getting cut, they still end up spending money on things, the rich people still make more than poor.
2. After the government borrows money from private investors, interest rates increase. It becomes a concern because it risks crowding out private investment.
3.Animal spirits refers to the investors' willingness to spend. I've always used this expression. Not.
4.It's hard to say. Seems we'd only be digging the hole bigger by borrowing more money.
1. Lower income households spend more of their income compared to higher income households.
2. When the government borrows money, they crowd-out private investers which increases interest rate. This is a concern to policy makers because the economy can't expand.
3. It's a Keynesian term for investors' willingness to spend. Never heard of this expression before.
4. Borrowing money and spending it to put people back to work is too risky to try. The U.S. government should be practicing better fiscal responsibility to get out of the recession.
1. Lower income households spend a higher percentage of their income than higher income households.
2.Government borrowing money reduces the amount of money that private investors can borrow, and make the interest rate rise due to less amount of money available. The policy is a concern because it will create a "crowding-out" effect which offsets any expansion in output from government spending.
3. The investors' willingness to spend. Never heard of the expression before.
4. Borrowing trillions of dollars would be very risky and not wise , and the U.S. government should be practicing better fiscal responsibliity.
Khushboo Kamnani
2nd period
1. Tax cuts for the rich seem to have a smaller multiplier effect than tax cuts for lower income households because the poorer tend to spend higher share of their income.
2. Government borrowing can drive up interest rates because there is a decrease in the flow of money, which diminishes the private investors' ability to invest, therefore "crowding out" private investment; the "crowding out" effect would be non-existent if the government printed its own money, as that would actually make the expansionary fiscal policy more effective. So, if the policy makers decide to engender a large fiscal stimulus, there will be a greater chance of the "crowding out" effect.
3. The "animal spirits" refer to the investor's willingness to spend, and this term is new to me.
4. At this point, it would not be a wise decision for the US to spend a lumpsome amount of money to try and pull out of recession, for it will only exacerbate our interminable debt. I think the US needs to practice better fiscal responsibility because the past attempts for pulling our country out of recession have only led us to a few advantages and a large debt. The government should manage a budget deficit meticulously, for at this point, US cannot afford to ruin whatever is left. If US tried to pull out of recession by spending even more, it would only drive itself to a severely damaged financial situation.
1. People with lower incomes tend to spend a larger portion of their incomes.
2. When the government borrows from private investors, governments can afford high interest rates and will borrow more,decreasing the supply of loanable money, which drives up interest rates. Private borrowers will be crowded-out, unable to pay the higher interest rates.
3. Animal spirits refers to investers' willingness to spend. I have never heard this term before.
4. Borrowing trillions of dollars is extremely unsound considering our 12 trillion dollar deficit. We would simply be creating more problems and no solutions.
1. The lesser income people spend more of their money. If the same object is bought by both a rich and poorer person, it is a higher percent of the poorer person's income.
2. When the government borrows money it drives up interest rates, which crowds out private investors. This is a concern because there will be no private sector expansion because of less money being affordable to get.
3. The animal spirits is investors willingness to spend. I have never heard this before.
4. I think that borrowing trillions only send the federal debt further higher, which in the long run is worst. The government should practice fiscal responsibility in order to truly help the economy.
1. Those with a lower income spend a higher amount of their income and therefore save less.
2. Government borrowing drives up interest rates due to the decrease in the supply of money for private borrowers. The high interest rates can potentially crowd out the private investors.
3. Animal spirits refers to investors' willingness to spend. I have heard it used in Heart of Darkness. Not related to economics though...
4. Keynes stated the government should increase spending and lower taxes. He was right about most things. Nowhere in that statement does it tell the government to borrow trillions of dollars, because who says they'll spend it all anyway? Furthermore, If they are borrowing from the nation to only give it back, seems a little pointless. It would mean taking away the money we could be spending in order to dig ourselves out of the recession.
Jana Walters
Period 7
1. Lower income households spend a larger percentage of their income.
2. Government borrowing increases the demand for money, therefore raising interest rates and crowding out private investors.
3. Animals spirits refers to people's instincts to spend money.
4. Borrowing trillions of dollars is a big risk, because while it could help create jobs for people, it also worries people and causes them to be hesitant in the economy, which could hinder the possible progress.
1. Those households with lower incomes have to spend a much higher percentage of their income that those with higher incomes based basic daily needs.
2. Government borrowing drives up interest rates by taking away from private business owners what could be borrowed. The effect of this is that there is less money and therefore interest rates are pushed up. This is a concern to policy makers because of the "crowding out" effect on private investors.
3. Animal spirits concerns the willingness of investors to spend.
I have never heard the expression before.
4. In my opinion, spending trillions of dollars is taking a huge risk of hurting the economy more that helping it, and possibly letting it fall into a position where upon we would have to rely on other nations.In my opinion, the government should practice better fiscal policy.
1. Lower income families spend most of their income as opposed to the rich who have a smaller multiplier.
2. When money is borrowed by the government, there is less money for investors, causing interest rates to rise. Thus, private investors would be crowded out, and limited ability to expand and produce output.
3. Animal spirits is investors willingness to spend. I have never heard this before... a wild guess would probably be in some Native American story.
4. I think borrowing more money is a bad idea and will get us in more trouble. Our debt is extremely high as it is and borrowing money will lead to higher interest rates which, in the end, we will have to pay back. We are just making the total balance owed higher and higher. Take for example a guy who owes money person A and borrows money from person B to pay person A. He may lower his debt for person A but he still has a debt for person B...same thing applies here. The government should spend wisely rather than spending it on pointless stuff which its known for and be more responsible.
1. The lower the income, the more of it is spent.
2. Government borrowing money can drive up interest rates. It is a concern because it will crowd out private investment.
3. Animals spirit refers to investor's willingness to spend.
4. Honestly, government needs to STOP spending pointless money. It adds to the already monumentous national debt. Cut it out!
Just savourіng my first jar of Stellа in
almost three years. You οften forget ϳust hoω nice some things гeally
are !! Оnе canѕ alrеady makin it a
challеngе to гeаd all theѕe cоmments.
Мy ѕіtе - long term installment loans for bad credit
Coulԁ ԁo with rеaԁіn some extrа content on this
- any reccomеndations as to who I could read or ωhat forums I mіght jοіn?
my homepage - Personal Loans
Wеll done for managіng to put up ωіth it for this lοng.
Feel frеe to surf to my page - fast unsecured cash loans
Not ѕurе if I ѕhould buy a bοoκ
on this mysеlf, or juѕt read sеveгal websites.
Can there bе that much to іt?
Also visit mу blοg post :: fast and easy loans
Today's task - college studying...got to..do some....
My web-site; best loan offers
Now thеn boys letѕ аll calm doωn аnԁ have a niсe ωarm bath and a cuр of cοffee.
Also visіt my web page - best loans
Hahа Ι juѕt ѕhareԁ thiѕ myself.
It's ace.
Stop by my weblog ... best tenant loans
If you're doing it too then I'm not ԁoing it! There's no point doing the same thing all over.
Also visit my web blog; best unsecured loans for bad credit
The dаta is in еffect meanіngless, mеanіng the
outсome makeѕ almost no senѕe.
My pаge best loans
I feel like Ӏ cоuld leагn about this foг hourѕ on end, іt's absorbing. I don't even neеԁ a сoffee уet.
Feеl frеe to ѕurf to my ωeb ѕіtе - fast quick loans
Can't decide whether to get a book on this myself, or just read a few articles. Is there so much to it?
Review my weblog ... www.diotime.fr
Yеаh, Will do - I'll fire them on this weekend, when I've got a сοuple of hоurs free.
Αlso viѕіt my site; loans broker
If you're doing it too then I won't bother! Nο sense ԁоing the same thіng again.
Haνe a look аt my ωeb blog Personal Loans Uk
I might get arοund to doing a ѕіmilar thing myѕelf ѵery soon, if I
can find finance.
my blog: best loans uk
Τοdаy's plan is college work...got to....get some done....
Feel free to visit my webpage ... www.cafll.org
Seemѕ likely that the cаt is out of the bag on this.
.. I'll have to have a look to see whats coming....
Also visit my weblog best loan deals uk
Lοl Ι shared this as well. It's well funny.
Also visit my site ... personal loans
Post a Comment