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I thought the old teaching said that during a recession when governments want to save money, the best strategy is to increase spending in order to increase the
by belorn 2y ago
I thought the old teaching said that during a recession when governments want to save money, the best strategy is to increase spending in order to increase the circulation of money and stimulate the economy, and when there is a economic boom and governments can afford to increase spending, they should do the opposite in order to save money for when a recession occur. This was the somewhat paradoxical strategy that I got taught in school during my teenage years.
I don't know how true this actually is.
- tormeh 2y agoThis is Keybesian counter-cyclic policy. It makes sense but is hard to do in practical politics.
- ty6853 2y agoWhich is why the federal reserve was ostensibly decoupled from politics and democratic election, and designed in secret on Jackyll island so the public would not poison it. Unfortunately as you say if you try to time the market, or centrally plan interest, you generally get it wrong and end up even worse than a floating market. It didn't take long before we saw the effects of the great depression.
- throw678937 2y ago[dead]