Abstract：Until the summer of the year 2000, the insufficiency of effective demand in China has lasted for thirty months. Our government has taken four policies to end this, which are monetary policy, financial policy, consumption policy, and income policy. But these measures are not so efficient as expected. This paper makes a deep anatomy and points out that the deep reason is the lagging and unfair distribution which cause the insufficiency of effective demand. It also puts forward that redistributing by means of the redistribution system and enhancing household's average propensity consumption should be a long term economic policy.
