Government spending and taxation

Writing Assignment

Students:  As you saw in lesson 9 the Keynesian model concluded that government spending and taxation can be used to stimulate a recessionary economy and also use the same tools to slow demand during an inflationary period.  This model suggests that the Federal government has, not only the ability to counter extreme business cycles, but also the responsibility to do so.

Ultimately, the application of macroeconomic principles can only be done in the political arena.  This is the primary reason why one cannot separate economics from the political process.  Inevitably, the very divergent opinions that emerge from each party are confusing at best—especially as it relates to deficits and public debt.  As citizens and voters, it is our responsibility to inform ourselves as best we can although it can be, and usually is, confusing.

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We are at a very critical juncture in our country as we ponder how to best deal with the many economic problems that we face.  The similarities to the late 1920s and the beginning of the great depression are many and ominous.  Then, as now, there were fairly distinct choices—do nothing and hope that things get better or use government spending as a way to stimulate spending in our depressed economy.  Then, as now, the argument between Democrat and Republican was heated and divisive.  In recent months, the argument has focused on debt with conclusions that reducing federal debt would solve most of our economic problems and begin to impact unemployment.

I would ask that you look at the materials (as well as any additional that you select), answer the questions that I have posed, and use those opinions for your group discussion.  I am asking for your opinion on these questions– but informed opinions.

The grading of this type of assignment is somewhat subjective.  I will be evaluating your work primarily on completeness and support of your opinions as well as comparison to that of your classmates.  Remember, the assignment is to communicate thoroughly and in organized fashion, your point of view.  Just putting words to paper does not mean that it meets these objectives, so think about what you are attempting to convey.  Write a minimum 600-word paper and at least one reference to be added to your posting which can be an article or video.  This paper must be uploaded on or before the deadline.


  1. How serious is the public debt situation in the USA?
  2. If we paid off the debt would that solve most of our other economic problems, such as unemployment?
  3. How should we approach balancing our budget…spending cuts only; tax increases only; a combination of the two?
  4. Should wealthier citizens pay a larger percentage?
  5. Why has concern about the debt suddenly become such a major political issue?
  6. Do you agree with the Keynesian Model…does government have the responsibility to try to maintain a stable economy?
  7. If you were an economic consultant, what would you recommend to deal with the unemployment problem?

Here are a couple of videos to get you started.

Your writing assignment has been posted in e-campus.  You must write a 500-word paper and upload it on or before the July 03, 2018 11:55 PM deadline. The paper will be scanned by safe-assign , use your own words. The assignment is in e-campus on the left-hand side in a tab labeled “Writing Assignment”.  Paper must be uploaded.  Good luck,

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