Pace Professor Michael Szenberg Gives his Two Cents about the Stimulus Act

Obama’s stimulus act was aimed at rejuvenating spending and encouraging economic activity, but Pace Professor Michael Szenberg says during the economic slump, the natural urge to save prevailed.

Management Today: What Would Keynes Think? . . . A significant motivator to the Keynes school of thought is that government intervention will help preserve the population’s animalistic spirit – the spirit and confidence to go out and spend money, start businesses and take chances in general.
. . . Obama’s stimulus act was aimed at rejuvenating spending and encouraging economic activity, but Pace Professor Michael Szenberg says during the economic slump, the natural urge to save prevailed.
“Keynes would say even the stimulus was not enough,” he notes. “It wasn’t enough because people still were not spending. Whoever got the stimulus just put it away. The animal spirits that encourage spending are just missing, to an extent.
“Consumption is the best driver of investment,” Szenberg says, “so Keynes is right. If people consume, the animal spirit will enter, and they’ll invest in machinery, factories, etc.”

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