The first article that was posted was a great metaphorical way to show how things can work for the Fed and for everyone in the government realm of economic decision making. This idea of baby-sitting the economy that Paul Krugman brings up is a great metaphor in showing how about 150 couples that have governmental connections will agree to babysit each others children under certain conditions and that if they do it once then the other couple will have to pay them back by babysitting their kids. This is very, very interesting in every sense of the word. Scrip (tiny pieces of paper) were handed out and traded as each one equaling to one hour of babysitting time for each couple. Really?! This is a very interesting part of the metaphor because Krugman brings out the point of inflation and if their is more "scrip" out their to be spent then more people would be more willing to go out and do what they wanted and hire a babysitter. So, overall this is a very good metaphor that I enjoyed reading about and learning from.
"Re-targeting the Fed" is an article that refers and analyzes the most recent economic downturn we have had in this country, "The Recession." This recession started at the end of 2008 and we are still feeling the effects of it today in our everyday lives. The second article that was posted was a review and analyzation of how and why the recession happened and was so detrimental to the economy. It refers distinctly how the decrease in NGDP was a major cause of this recession and is overlooked a lot by many economic thinkers. This was a very informative article that helped me dive into even more of the reasons for why we suffered through this recession and still are.
The general consensus (among all of our classmates, based on the blogs that I've looked at) shares your reaction to this article and I do too. Scrip kind of reminds me of Monopoly money. Maybe if we required people to be a part of a "money-exchange simulation" before allowing them to be financially independent more would better understand the workings of the economy and have more efficient money management skills. Not using real money would be a great way to teach people, while still allowing room for error. Just a random thought! What do you think?
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