Economics

By Edmund L. Andrews


WASHINGTON - For Democratic presidential contenders, the growing risk of a recession is an opportunity for action. For Republican contenders, accustomed to calling for less government intervention, it presents a dilemma.
In the last several days, the leading Democratic rivals have rushed out proposals to spur the economy with one-time tax rebates, expanded unemployment benefits, money to prevent home foreclosures and assistance for state and local governments.
Senator Hillary Rodham Clinton of New York has proposed $70 billion in emergency spending programs, with an additional $40 billion in tax rebates if the economy worsens. Senator Barack Obama of Illinois has a $75 billion plan based largely on immediate tax rebates of $250 to most workers to encourage consumer spending.


http://www.msnbc.msn.com/id/22657749/

Command economy

Command Economy
Economy planned and directed by government, where resources are allocated to factories by the state through central planning. This system is unresponsive to the needs and whims of consumers and to sudden changes in conditions (for example, crop failure or fluctuations in the world price of raw materials).
For example, in the former USSR, state planners decided what was to be produced. They passed orders down to factories, allocating raw materials, workers, and other factors of production to them. Factories were then told how much they should produce with these resources and where they should be sent. If there was a shortage of goods in the shops, then goods would be rationed through queuing.
In theory, the time and money spent on advertising and marketing in a free-market economy can in a command economy instead be devoted to producing something useful. However, historical experience in the 20th century suggests that planned economies have not produced as high growth as free-market or mixed economies. In practice most economies tend to be mixed, combining free-market policies with some state intervention.