Does Government Spending Help Alleviate Our Recession?

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Dichele Parker Introduction to Business Controversial Issue Project – Does Government Spending Help Alleviate Our Recession? From the research I have done my theory is that the government not only can help, but can alleviate the current recession we are in. In the course of a recession, a government can try to increase economic growth, employment and motivate the economy by spending the taxpayer’s money on government plans. This approach is based on Keynesian economics, famously utilized in Franklin Roosevelt’s New Deal in 1937 during the great depression, and now resurfacing in the eye of our global crisis. Economic growth is defined as the increase in the quality and quantity of goods and services, which results in hundreds of thousands of entrepreneurs hiring more workers, presenting technological innovations and improving worker productivity. Entrepreneurs tend to expand businesses and hire more workers when they perceive a profit will be made. Workers offer their labor when they believe that the profits are equal or more than the labor required. Through excessive spending, the government negatively disturbs the growth in the output of goods by reducing business profits and worker’s pay. Not every dollar spent by our government is a poor choice. To ensure a functioning economy its important where the government spends our tax dollars, such as investments on roads, ports and bridges aids in the improvements of our economy. Some government spending is crucial for a properly functioning economy. Critical areas demand more government spending such as meeting global challenges, improving U.S. competiveness, focusing on challenges related to poverty and demography and sustaining the quality of government services. The United States continues to rank near the bottom in the western world in terms of the share of its budget and its economy that it
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