Fiscal and monetary policy

Essay by EssaySwap ContributorUniversity, Master's February 2008

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Congress and Fellow Constituents: I have come before you and am asking your help to get our nation out of a worsening recession. Our Dow Jones stock average is dropping and we are suffering an unemployment rate that is going through the roof, also our manufacturing production has been dropping for the past three consecutive Quarters. I ask, how can we get our self out of this Horrible Recession? We must put the necessary Fiscal and Monetary policies into effect. With out them we are not going to pull out of recession and our economy will fail. What can we do? Well we should lower taxes, why? You ask, this would "pump" more money into the financial system thus giving the people more to spend and keeping prices low, and we should also raise the government spending budget so that we can get even more money into the economy thus pulling us out of this horrible decline.

There are also monetary policies to put into effect. Such as lower interest rates, lowering interest rates would cause more people to borrow, and more borrowing will put more money into the pockets of the people, as a result giving them more money to use and spend, therefore taking us out of our slump. Lowering the reserve requirement will also help us take our country out of this slump by making the Federal Reserve place more money in the hands of the banks to loan out, which would award more money into the hands of the consumers. Also banks selling government bonds to the Federal Reserve will put more money into the banks which would offer money for the consumers to borrow so they will have more money to spend thus again pulling us out of this recession. Subsequently I have no power...