On recession cycle, individuals and organizations ‘cost cutting’ but why Governments are spending more ?

Hello,

probably i did not get your question, but i may say on recession usually all organization they limit their expenses to the minimum, and governments usually try to balance their spending with the expected revenue, however in some case they tend to do some extra spending to motive the economy and complete economical cycle

best regards

The question in itself contain answer: In days when business is contracting and not willing to spend, the economy will continue to go down unless there are compensating activities. This is the reason that government tend to spend more in such days. This is also known as Pump Priming Policy taking the analogy from a water pump when it does not suck water, so you put some water in the channel to make it work.

Actually its because of role difference, companies have the limited roles hence they take measures accordingly. Other hand Governments has wide spread roles and impacts hence they have to pull out economy through efforts and regulations case to case basis.

The answer is: To regulate the economy. Government has some role to play in the recession. So they are trying to fix it now. Recession has most to do with Government policies, strategies and irregular spending, economic inflation, and interest rates which has led to the recession.

Well, Individuals and organizations have taken a step back just as precautionary measure. Its the fear that gets to the people where everyone is afraid to spend the precious money.