A Solution?

In my economics class we recently discussed fiscal policy and how the federal government uses it to influence the economy.  Although we just moved onto a new unit, I thought it might be interesting to actually try and create a solution or an exit strategy from the current recession.

The first thing that must be known is that any plan of action will take time, and probably more time than predicted.  My idea, was to utilize expansionary fiscal policy to help pump money into the correct places of the economy.  Expansionary fiscal policy is basically allowing for more government spending on programs like social security, Medicare,  Medicaid, and education, which will soon take up most of the federal budget, and create more tax cuts to give people extra money and hopefully pump it back into the economy.

This will work because by giving Universities and Colleges the ability to award bigger scholarships to people in need, allowing banks to have the money and confidence to provide appropriate loans to those who can afford them, and subsidizing businesses to expand to the proper utilization of their resources, more jobs will be created along with people to fill the slots.  On top of that, with tax cuts people will be able to buy more things and increase demand along with the GDP.

The thing to keep in mind is that the economy is a frequently changing system, and although the current situation is melancholy to say at the least, the economy has and always will fix itself.