These demand management policies were not very useful. If you increase aggregate demand, inflation gets worse. If you decrease aggregate demand, unemployment gets worse. These times really caused economists to question discretionary fiscal policy. Other Issues that affect Fiscal Policy Lags Time is needed to approve and implement policy.
Lag time can hamper fiscal policy effectiveness.
Permanent income is the income that a person believes they will receive over the long term. If consumers feel like a policy is only temporary and does not truly effect their permanent income, the policy is not very effective.