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Government Aid to save the nation economy
Keynesian Economics

Keynesian economics is an economic theory named after John Maynard Keynes (1883 - 1946), a British economist. It was his simple explanation for the cause of the Great Depression for which he is most well-known.

His ideas was caused to change the interventionist economic policies during the Great Depression. Keynes' economic theory was based on an circular flow of money. One person's spendings goes towards another's earnings, and when that person spends her earnings she is, in effect, supporting another's earnings. This circle continues on and helps support a normal functioning economy. When the Great Depression hit, people's natural reaction was to save their money. However, under Keynes' theory this stopped the circular flow of money, keeping the economy at a standstill.

Keynes' solution to this poor economic state was to prime the pump. By prime the pump, Keynes argued that the government should step in to increase spending, either by increasing the money supply or by actually buying things on the market itself. In the times of the Great Depression, however, this was an understandably unpopular solution. It is said, however, that the massive defense spending that United States President Franklin Delano Roosevelt initiated helped cure the US economy.

GM Seeks More Government Aid

General Motors Corp. is requesting another $16.6 billion under its restructuring proposal, bringing to $30 billion the total amount of government assistance it says it needs to remain viable. The company released its outline, saying additional capital is needed as the automaker plans to implement other cost-saving measures involving personnel, plants and vehicle brands.

The highlights of the restructuring plan announced by GM:
• Saturn will remain in operation for the next several years, through the end of the planned life cycle. In the period, GM said it would be open to sale or spin-off of the brand. If a spin-off or sale does not occur, GM plans to phase out the Saturn brand at the end of the current product life cycle.
• A decision to sell or phase out the Hummer brand by March 31, with a final resolution expected no later than 2010.
• A strategic review of the global Saab business is complete and GM has put it up for sale.
• GM’s dealer count will be further reduced, from 6,246 in 2008 to 4,700 by 2012, and to 4,100 by 2014. Most of this reduction will take place in metro and suburban markets where dealership overcapacity is most prevalent.
• GM will close an additional 14 facilities by 2012, five more than were included in the Dec. 2, 2008 plan.
Also, the company's U.S. employment will fall to 72,000 by 2012, down from 92,000 hourly and salaried workers at the end of last year.

Let's AIG Go Bankrupt, Not America

American International Group should be allowed to go bankrupt because keeping it and other sick financials alive on government support risks ruining the US economy, legendary investor Jim Rogers told CNBC Tuesday.

"Suppose AIG goes bankrupt, it is better that AIG goes bankrupt and we have a horrible two or three years than that the whole US goes bankrupt," Rogers said. "AIG has trillions of dollars of obligations, let them fail, let the courts sort it out and start over. Otherwise we'll never start over."

On Monday, CEO Edward Liddy told CNBC that the insurer is far more stable and secure than it was last fall but acknowledged that it was "difficult to say" if AIG will need even more money from the government in the future. Bailing out the banks is going to increase the debt spiral and finally cause the destruction of the world's biggest economy, Rogers said.

Question
1. What kinds of economic activities do you do? Let's talk about your economic activity.
2. Do you think economy is made from minor? Or Do you think econmy is made from major?
3. Do you agree or disagree that gorvernmnet should help companies which struggled with bad economic situation?

This week, Jieun will do her 5 minute speech.
I hope see you in the this week regualr meeting!:)

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