1. What would be a classical economist's suggestion for dealing with economic recession? 2. What would be a Keynesian economist's suggestion for dealing with economic recession? 3. Do you believe that God is in control of our nation's economy? 4. How would you apply "In God we trust" in your personal life? 5. Can an economic recession have any benefits for a country? (Think drawing closer to God, cutting wasteful spending, promoting frugality, etc.)

In God We Trust "And without faith it is impossible to please God, because anyone who comes to him must believe that he exists and that he rewards those who earnestly seek him" (Hebrews 11:6, NIV) There are three basic macroeconomic problems faced by any nation: economic fluctuations, unemployment, and inflation. Before the Great Depression, classical economists believe that market adjustment would be able to deal with these problems. For instance, if the economy is in recession, lower demand for the loanable fund will lower the interest rate, and lower demand for labor will lower wages. Lower interest rates will increase the aggregate demand and lower wages will increase the short-run aggregate supply. These changes in turn will increase output and the economy will eventually be out of the recession and resume expansion. The Great Depression changed some economists' thinking. Instead of relying on market adjustment, Keynesian economists believe that government intervention could stabilize the economy. For instance, if the economy is in recession, the government could adopt an expansionary fiscal policy by increasing spending and/or cutting taxes to increase the aggregate demand and the Federal Reserve could adopt an expansionary monetary policy by reducing the federal funds rate to stimulate borrowing and investment to increase the aggregate demand. Either policy will increase the output. Viewing the economy as a human body, market adjustment is like the immune system and the government is like the medical doctor. If we were sick, we could rely on our immune system to heal us or go to see a doctor for treatment. Similarly, if the economy is experiencing a recession, we could wait for market adjustment to heal the economy or have the government implement either fiscal or monetary policy to treat it. Today, economists are still debating which approach is better. Is God in our economy? We believe God created and sustains heavens and the earth. "In God we trust" first appeared on U.S. coins in 1864 and has appeared on Federal Reserve notes since 1957. The motto "In God We Trust" reminds us that we should trust ultimately in God and not market adjustment or government intervention to deal with economic problems.

Just like we come before God in prayer for individual needs, we should come before Him as a nation when we have economic problems. God is loving and wise. He will show us whether we should let the market make its own adjustment or use government policy to achieve sustainable economic growth, price stability, and full employment. We can see in Genesis how God gave wisdom to Joseph to deal with the coming business cycle in Egypt. "Let Pharaoh appoint commissioners over the land to take a fifth of the harvest of Egypt during the seven years of abundance. They should collect all the food of these good years that are coming and store up the grain under the authority of Pharaoh, to be kept in the cities for food. This food should be held in reserve for the country, to be used during the seven years of famine that will come upon Egypt, so that the country may not be ruined by the famine" (Genesis 41:34-36). As we see in the passage above, we and our national leaders should submit to the Lord and His guidance if we are sincere in asserting that "in God we trust."