Its the Aggregate Demand, Stupid by Bruce Bartlett - Assignment Example

It’s the Aggregate Demand, Stupid by Bruce BartlettTHESIS STATEMENTThe assignment critically summarizes the article “It’s the Aggregate Demand, Stupid” by Bruce Bartlett and explores the key points underlined by the author. Moreover, the discussion also includes examining the key points and elaborates major factors leading to the debate over the government’s focus on the debt vs. focus on aggregate demand based on the relevant academic theories and implications. BRIEF SUMMARY OF THE ARTICLEWith reference to the article, It’s the Aggregate Demand, Stupid” Bartlett has made a strong set of condemnations on the issue of increased focus on debt rather than concentrating on increasing the level of aggregate demand.

Moreover, the author articulated that the aggregate demand is the major element with respect to the current economic condition that can create jobs and stimulate economic growth of the US. IDENTIFICATION AND CRITICAL EVALUATION OF THE KEY POINTS IN THE ARTICLEThroughout the article, Bartlett has critically explored the issue concerning the economic growth and downfall of the current labor market of the US. According to the article, it has been perceived that the lack of focus in aggregate demand along with insufficient investment and immaterialized consumption expenditure have lead to a major downfall of economy.

The current economic policies of the nation are determined to be insufficient to address the needs of creating jobs and stimulating economic growth. However, the only effective measure to attain this goal is perceived to be related with increasing aggregate demand. According to the theoretical context, it is often attributed that the lower growth in the annual consumer spending substantially creates major vulnerabilities in the inflation rates that causes major debacles in the economic growth (Bartlett, “It’s the Aggregate Demand, Stupid”).

In relation to the current policy measures of the Federal Government, the article reveals that Administration is centrally focused on maintaining average growth rather to substantially increasing the level of annual consumer spending in the US. However, the mechanism is quite difficult due to the emerging level of unemployment within the states. Therefore, the existing administration is significantly inviting major risk for the nation due to its policy directed towards increasing savings while reducing the consumptions of goods and services by household, business and government.

Although the policy of reducing aggregate demand promotes increasing household savings and maximizing the wealth, but in long run, the process inadvertently calls for a major financial debacle in the nation (Bartlett, “It’s the Aggregate Demand, Stupid”).In addition, the article also reveals that the frequent fall and rise in the household spending often lead towards creating major changes in the velocity of money which is evident from the current scenario of the US. The adequate improvement of velocity significantly ensures major growth in the GDP, but fall in the velocity has equivalent impact on national economy to that of the percentage fall in the money supply.

It is thus essential for the policy makers to concentrate more on increasing the aggregate demand as it increases the velocity of money rather than emphasizing on measures to curtail the debt. To conclude, the article significantly ascertained that an effective control or increase in the households’ spending can significantly empower the Federal Administration to avert possible threats from the fall of velocity of money (Bartlett, “It’s the Aggregate Demand, Stupid”). Work CitedBartlett, Bruce.

It’s the Aggregate Demand, Stupid. The New York Times, 2013. Web. 16 Nov. 2014.