Suppose that our economy is now in the midst of a recession. The GDP has been falling for two years, and the unemployment has risen from 5% to 12%.Unemployment has hit the young people particularly hard, with 18% of people under 25 not able to find work. You hear many call for government intervention. The proposal is that the government should double its spending from last year, and spend the money on various projects around the country to boost employment and output. They are already talking about a particularly large drone factory, which will employ 10,000 people in Louisiana and will produce drones for various needs in the future. It will be operated by an arm of the partially publicly funded Amtrak railroad service, since this way the government will be able to not only fund but also oversee this operation.

Is there anything you can argue in favor of the rise in government spending to stabilize the economy? If so, please explain why and use terms such as aggregate supply and aggregate demand.