00:01
So here we're going to talk about fiscal policy, and fiscal policy is the effect of government spending and taxation on the level of economic activity.
00:09
So first of all, we have will increase the size of the federal debt.
00:13
This is absolutely a criticism.
00:16
Fiscal policy will increase the size of the federal debt.
00:20
There's no doubt about it, right? the government is going to cut taxes and boost spending to stimulate economic activity.
00:26
Though, again, you've got this word here only.
00:28
And that's a little harsh, but it will absolutely increase the size of the debt.
00:35
There's no doubt about that.
00:37
But this is also people believing in a low effect, right? the story here is that only increase, well, most people would argue that fiscal spending will do something for economic activity.
00:57
But yeah, there's absolutely concerns that it will affect the side of the federal debt.
01:02
That it failed during the depression.
01:04
This is, again, another valid criticism that people bring up all the time.
01:09
Again, people do generally agree that world war ii took the economy out of the great depression, but the new deal did not end the recession, the depression by any stretch of the imagination, right? the new deal gets rolled out in 1933.
01:27
Tons of new federal spending comes in, all sorts of federal economic activity.
01:33
But the depression continues for another six years, right? so there's lots of people who think that the federal responds to the new deal, to the great depression, the form of the new deal and government spending, is definitely a valid criticism.
01:46
Uncertain ad effect.
01:48
This is the one that we're looking for, right? this is not a valid criticism...