Spending: What the heck is the Government doing?

We are in a recession, so what does the Government do? Spend more? Cut taxes? Have you ever though of why the Government thinks that will work? This theory stems from the Keynesian Economic Model. Spend more, then consumption will increase, which will increase demand, which will kick-spin supply and voila! The economy is back on its merry way to a recovery. So why didn't it work in 2009? Well the stupid Government should have thought a few things through before pushing a TON of money into the economy (inflation anyone?).

What do we spend our money on? Stuff that we produced? Services? Don't make me laugh! We buy crap! Lots and lots of cheaply made crap from other countries. I think it stems from our grandparents generation that was always looking for a good deal. As a result we have dug ourselves into a nice hole. A very BIG one at that!

Lets look at how much  our country puts out every year.  I assume this is not adjusted for inflation (it is just a few years, so not quite necessary).

 You can see that we went through a dip there for a while, but we are on our merry way to producing again. How do you feel? Good? So the stimulus work?

Well let's look at another happy graph.

 Okay, I lied, this is not a happy graph. This is our Debt to GDP ratio. What does it mean? in 2013 our U.S. National Debt is higher than our total output (GDP).  Now how are you feeling?

Well I'll leave this blog at this thought. If you feel really bad, take a look at this webpage, then you will feel worse. Happy Reading!

http://www.usdebtclock.org/