There was a great graph in the NYT Week in Review on Sunday. Considering the growing US deficit and the affect spending cuts would have on it, this is a dramatic illustration.
By the way, the EU government announced that it would add financial help to aliviate the sovereign debt of Greece.
Question: What is the difference between fiscal and monetary policy?
Answer: Fiscal = budgetary choices of taxing and spending
Monetary = federal reserve decisions on interest rates and monetary supply.
Question: What do the Stimulus Plans look like World Wide?
Answer: This is a great interactive site that allows you to click on a nation and see what they have to done so far to try and save their economy.
2 comments:
I guess it could be theoretically possible to eliminate the deficit if we were to withhold a lot of money from a combination of the areas listed in the diagram... but that wouldn't be desireable. Will we forever be in deficit? Is it even in our best interest anymore to try and eliminate the deficit, or will we just focus on shrinking the yearly deficit just a little?
We're not the only ones. Pretty much everyone owes each other money - deficit spending is chic these days. What we need to do is figure out who owes what to whom, and pay it all off simultaneously.
Ex: Assume the existence of countries A, B, C, and D. Country A borrowed X dollars from country C to spend stuff, Country C borrowed Y from B, B borrowed Z from D, and D borrowed ? from A. D pays A back, which A uses to pay C back, which C uses to pay B back, which B uses to pay D back, which D used to pay A back at the start of this sentence.
Most of the money isn't real (thanks to credit cards, portable pieces of deficit spending plastic). We have to acknowledge that, and pay each other back all the fake money. Of course, it'd take a million economists a million years to figure it all out. . .
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