Dear Mr. President,

As the recession drags on and unemployment rates continue to hover above 8%, it is advisable to take a more aggressive expansionary stance towards fiscal and monetary policy. Here are my recommendations for changes to fiscal and monetary policy.
Fiscal Policy With the cooperation of congress, it would be adventitious to increase government spending as well as temporarily reducing the tax rate. Reducing the tax burden will see immediate increases in take home payroll and boost consumption and consumer confidence. Additional government spending will inject additional money into the money supply as well as boost consumption. (Stone, 2008) (Keller Graduate School of Management, 2013)
Monetary Policy It would be ideal to utilize the connections and clout associated with being President to influence the Federal Reserve Bank to keep interest rates relatively low and encourage Open Market Operations to aggressively purchase bonds. Low interest rates promote business expansion, job creation, and consumer spending. Aggressively purchasing bonds will inject money into the monetary supply and promote lending. Because much of this recession was due to irresponsible lending, banks should not have a lower reserve requirement. Increasing the reserve rate now may prove counter-productive to the recovery, so for now it should be held at current levels. (Stone, 2008) (Keller Graduate School of Management, 2013)
Other Considerations It is important to note that changes to both fiscal and monetary policy take time, and should not be changed before adequate time has passed. Lags in the effects of policy changes can last for months, or even years. Despite the painful state of the economy, give policy decisions time to work. (Stone, 2008) (Keller Graduate School of Management, 2013)

Works Cited

Keller Graduate School of Management. (2013, 12 7).