Response to 9/30 Reading

I had never heard of a babysitting Co-op until now and the way Krugman metaphorically ties the Fed and the babysitting Co-op together is very realistic and also creative.  People have hoarded money in a time when it was scarce, just like the couples that hoarded coupons for a babysitting service, and now there's not that much money to go around.  People are very scared and reluctant to use their money, they want to hold it and keep it just in case.  Basically, they'll find ways to 'cheat' the system and save money when in actuality they need to go out and spend their hoarded money to stimulate the economy.

I was totally against inflation at first in class.  When we discussed how it actually could stimulate the economy, it changed my view.  Controlled inflation is not a bad thing.  It puts more money in circulation and creates a stimulated economy that can provide more jobs and happier people, in my opinion.  This is what our economy needs.  Someone needs to step up and take action.

In Sumner's article, he supports the fact that controlled inflation is the way to go.  For example, he talks about workers and how in a "mild inflation" climate, workers actually have a better possibility of getting small pay increases whereas an economy with close to zero or right at zero inflation rate end up have to cut all workers' pay.

It's very clear that both authors think that controlled inflation is the best thing for our nation's economy.  I agree with them.  If we had a little bit of inflation, it would be better for everyone.  Inflation rates don't need to go too high and they don't need to drop.  Just the right percent will stimulate the economy and create a better place for everyone.

Response to reading 9/21

The articles we read explained different reasons of why we're in the recession and what needs to happen to get us out.

With the first article, the blame shouldn't all be placed on President Obama's shoulders.  Without the congress and other nation figures backing him up, he doesn't have that much power.  Recently, the house and senate have been divided, one of them siding with one political party, the other with the opposite or vice versa.  There's a number of things that have caused the recession.  Blaming it all on the current president is not right.  President Obama came into a mess and he's trying with all the power he has to fix it.

I disagree with the second article from the New York Times.  Decrease in demand is not the only reason why people haven't done anything to fix the recession.  It is a big part of it but it isn't the only reason why we're in a recession.  There's many technological advances that are happening that take jobs away, decreasing the number of jobs available.  When there's less jobs, people have less money to go out and stimulate the economy by buying things.  There's multiple reasons of why we're in a recession.

All the articles brings up a good point of why we're in the recession.  Now what to do is the bigger question.  And an even bigger question, who is going to step up and do what is necessary to take action?