068: The Fiscal Stimulus and The Output Gap - A Messy Art Form

Patti meets with her Chief Planning Officer, Eric Fuhrman, to discuss the recent fiscal stimulus packages and the effect they have on the nation’s output gap. To understand the relationship between the two, they first define the concepts and then give a historical perspective. Many Americans are asking the question, “Why does the government spend huge sums of money during economic crises?” Patti and Eric answer this question and delve into the nuances of how the government determines exactly how much to spend. They also explain why this practice has been so effective for our economy – contrary to some public reaction that may be heightened when discussing figures of this magnitude.