During the Great Recession, like any other economic downturns, as unemployment rises, aggregate income declines to cause a major decline in tax collections. On the other hand, with the rise in unemployment, spending on safety net programs rise. So, there are not too many good options available to resort to the health of the national economy.  It will be very difficult to defend cuts in the federal government programs and especially the programs geared to sustain the minimum of the standard of living for the recent poor. So, the government needs to increase its borrowing. Deficit spending refers to government spending exceeding what it brings in federal income and corporate taxes during a certain period. Deficit spending hence increases government debt. Most economists accept that deficit spending is desirable and necessary as part of countercyclical fiscal policy. In such a case, government increases its borrowing and hence its deficit to compensate for the shortfall in aggregate demand. This is derived from Keynesian economics and has been the mainstream economics view.  Following John Maynard Keynes, many economists recommend deficit spending to moderate or end a recession, especially a severe one. When the economy has high unemployment, an increase in government purchases creates a market for business output, creating income and encouraging increases in consumer spending, which creates further increases in the demand for business output. (This is the multiplier effect).  This raises the real gross domestic product (GDP) and the level of employment and lowers the unemployment rate. Government borrowing under such circumstances increases the demand for borrowing and thus pushes interest rates up. Rising interest rates can “crowd out” (discourage) fixed private investment spending, canceling out some of the demand stimulus arising from the deficit

Write an essay analyzing the advantages and disadvantages of deficit spending and the effects of federal government borrowing on the economy i.e., the crowding out effect.

The assignment title is:
“Asses the most important macroeconomic impact(s) of the covid-19 pandemic”

I need an extremely technical macroeconomic analysis of the current state of the coronavirus (Covid-19) on the world economy. I want you to look at how certain countries have reacted, and mention that not every country is affected equally (this could be done in two sentences). I want you to use OECD and other government accredited sources, as well Wall Street Journal, Financial Times, Bloomberg… basically very accredited economic sources. I want you to look at how rational choice theory will be affected… as I mentioned before, quite technical and really ANALYSING. The class is a second year economics class and is titled Economic Theory and Application.

Some things to consider:
How governments reacted, with QE in the USA, shifts in demand and supply, different market failure and specific industry-wide bankruptcies, affects this may have on income distribution and inequality, as well as a broader problem of unemployment, speak about inflation, deflation, and monetary policy, how this may create another bubble & crash and how governments are taking measures to mitigate this from happening (touch upon debt and increases in government debt), and fiscal policy.