As banking system showed that we need greater regulation, the same verdict can be given to other important economic sectors. But here the problem of right regulation is again a great problem. The old word that economist like to say that it is not enough to have the desire to do well but having the knowledge of doing this seems a heavy burden. As economy is still staggering over the years, there are still policy problems on how to contact it.
We all knew from our basic study of macroeconomics that in such times aggregate demand must be increased. For this, we need a rising level of government expenditure and tax cut. But liberals and conservatives are on two front regarding how to allocate the government expenditure in economy. While the liberals …show more content…
But one may argue that conservatives are being financed by big businesses for such proposals. After all, in such crisis, people are less likely to go for investment even the tax rates are lowered. The level of consumption is not likely to be increased overnight or beyond the usual general standard of life as there are still persistent unemployment. And if taxes are decreased, they may bring very little benefit and will help big businesses to accumulate more profit and by this process they will have further monopolistic power. And there is good reason to belief that there are already symptoms of unrestricted monopoly by large corporations which need to be curved. Certainly any policy which will cause economic growth in expense of further power to big business is clearly an advent toward a greater risk in future. The liberals are noble sounding and it may seem socialism has greater weight in their book than unregulated private enterprise but then having a noble mind is not enough. After all, it is doubtful that whether government can really bring fruitful result from expenditures at all. …show more content…
Bush was elected president in 2000, a major element of his platform was a cut in income taxes. Bush and his advisers used both supply-side and Keynesian rhetoric to make the case for their policy. (Full disclosure: The author of this textbook was one of Bush’s economic advisers from 2003 to 2005.) During the campaign, when the economy was doing fine, they argued that lower marginal tax rates would improve work incentives. But when the economy started to slow, and unemployment started to rise, the argument shifted to emphasize that the tax cut would stimulate spending and help the economy recover from the recession. Congress passed major tax cuts in 2001 and 2003. After the second tax cut, the weak recovery from the 2001 recession turned into a robust one. Growth in real GDP was 4.4 percent in 2004. The unemployment rate fell from its peak of 6.3 percent in June 2003 to 5.4 percent in December
We all knew from our basic study of macroeconomics that in such times aggregate demand must be increased. For this, we need a rising level of government expenditure and tax cut. But liberals and conservatives are on two front regarding how to allocate the government expenditure in economy. While the liberals …show more content…
But one may argue that conservatives are being financed by big businesses for such proposals. After all, in such crisis, people are less likely to go for investment even the tax rates are lowered. The level of consumption is not likely to be increased overnight or beyond the usual general standard of life as there are still persistent unemployment. And if taxes are decreased, they may bring very little benefit and will help big businesses to accumulate more profit and by this process they will have further monopolistic power. And there is good reason to belief that there are already symptoms of unrestricted monopoly by large corporations which need to be curved. Certainly any policy which will cause economic growth in expense of further power to big business is clearly an advent toward a greater risk in future. The liberals are noble sounding and it may seem socialism has greater weight in their book than unregulated private enterprise but then having a noble mind is not enough. After all, it is doubtful that whether government can really bring fruitful result from expenditures at all. …show more content…
Bush was elected president in 2000, a major element of his platform was a cut in income taxes. Bush and his advisers used both supply-side and Keynesian rhetoric to make the case for their policy. (Full disclosure: The author of this textbook was one of Bush’s economic advisers from 2003 to 2005.) During the campaign, when the economy was doing fine, they argued that lower marginal tax rates would improve work incentives. But when the economy started to slow, and unemployment started to rise, the argument shifted to emphasize that the tax cut would stimulate spending and help the economy recover from the recession. Congress passed major tax cuts in 2001 and 2003. After the second tax cut, the weak recovery from the 2001 recession turned into a robust one. Growth in real GDP was 4.4 percent in 2004. The unemployment rate fell from its peak of 6.3 percent in June 2003 to 5.4 percent in December