You decide paper - get the economy stimulated by government...

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Mr. President, The U.S. economy has fallen into a recession. It is a severe and deep recession, and one that some economic analysts say may persist for at least another year. The unemployment rate has risen to levels not seen in over 20 years. The current unemployment rate is at 8% and is expected to rise further. The inflation rate is -2.4 percent, meaning that overall, prices are falling. Our primary goal at this time is to focus on expansionary Fiscal policy which is to help create jobs and reduce unemployment by 4% and our second goal is to consult with the Feds to increase the money supply in order to increase inflation above zero so the real value of money and other monetary items will increase and encourage investment and savings. To reduce unemployment, we should work with Congress to increase government spending and lower taxes. Gross domestic product equals consumer spending, investment, and government spending. The economy is in a state of less consumer spending and investment so the general ideal and focus is to
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Unformatted text preview: get the economy stimulated by government spending. Increase in funds will be appropriated to assorted agencies and the agencies will then make the additional purchases which stimulate aggregate production, boost income, and increase the level of employment. The idea of increasing taxes and reducing government spending will weaken the economy into a deeper recession and jobs will not be created. The country needs to create a stronger dollar in the economy. Working with the Feds to control the discount rate, federal funds rate, open market operations, and the bank reserve will also stimulate the economy. It appears that the interest rate is low due to the negative inflation rate so leaving the interest rate as is will be a good idea. However, the banks liquidity needs to increase so selling bonds in exchange for cash will allow the banks to increase their customer deposits and loaning capabilities to create jobs and strengthen the dollar....
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This note was uploaded on 04/13/2011 for the course ECONOMICS econ301 taught by Professor Mankiw during the Spring '10 term at American College of Computer & Information Sciences.

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