Time Lags
What happens when the government puts off issues?
Time is wasted
What does the expenditure multiplier enable to government to do?
Stimulate the economy
Why can't the government simply cut government spending to increase spending?
Politicians disagree on where to cut money
Where does the government get money to spend?
Taxes
Why do solutions often not work?
Too much time has passed thus problems changed
What would congress need to do (in theory) to slow an accelerating economy?
Reduce its spending
What is required for political success?
Increasing spending and reducing taxes
What happens when you tax businesses more?
They have less money to pay employees
Name an issue that debating can cause?
Political Maneuvering or compromise
What is the result of lack of precision when it comes to calculating the multiplier?
The government cannot effectively stimulate the economy
Why does this fail?
we cannot spend money and reduce taxes
Why can't the government just make more jobs?
Everything costs money (it would need increased taxes)