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Strategy Economy Development in the United ...
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Essay by:Dongni Wang
Emporia State University
2008 is a tough year for the United States. “In a report to Congress, the Bush administration says federal expenditures will exceed revenues by $389 billion this year, and by a record-high $482 billion in fiscal year 2009” (Bowman). The huge federal debt and unfunded liabilities makes the United States face a deepening financial and economic crisis. Actually, the crisis somehow quickly spread all over the world.
Students graduating from my hometown in China have indicate it is much more challenging to get jobs. Hopefully, it will not reduce my opportunity to go to graduate school and then contribute to our global economy.
In my opinion, there are three major causes of the crisis. Firstly, the United States housing bubble is a major factor. Housing market is always an important part of economics. When home prices reach the peak of the market, many speculators try to get profit from the market; however, the speculation made the housing bubble rapidly become bigger in an unhealthy direction. Secondly, following the housing bubble was the subprime mortgage crisis. Many large banks were involved in this crisis. Actually, it is not a short-term phenomenon; the roots of it can be track back to last several years of 20th century. Problems were not formed only by several actions, but a series of weakness in the market and specific industries. Thirdly, the more towards pure capitalism, emphasizing market and less government. The role the government should play in today's economics become more and more important. The relationship between microeconomic and macroeconomic is also another important part of economics today. On another hand, we may have to back to the old issue of macroeconomic control.
The suggestion I have are both domestic and international.
1. Put more money in medicare, education, Social Security, and some other places which can directly affect this and the next generation. As the baby boom and aging happened, the government must face it now or it will cause much more problems. This means higher payroll taxes.
2. Government should try some ways to decrease unemployment. To offer more jobs becomes an important issue today. Another thing that can be done is to offer some educational opportunities to the workers who lost their jobs. The cost of this option must be partly paid by government.
3. Taxes is another important aspect in economics. An income tax cut can help to increase consumption. Reassuring the consumers is the first step of stimulating consumption. A tax cut can also help medium and small-sized enterprises.
1. Cooperation between other countries is obviously important during this period. China would be an excellent partner this time. The strategic economy development program between the United States and China could be a best way for both two countries to both expand..
2. The travel industry is another issue area for improved understanding and trust. International travellers help to stimulate consumption. To fetch in more and more tourists, government can put some money in basic transportation and famous places reconstructed, which can provide more jobs. Until we get to know each other, we find it challenging to trust each other.
3. Maximization use of education resources to attract more international students would help increase productivity and understanding. This is similar to increasing travel.
Bowman, Michael. “US Budget Deficit Expected to Hit Record.” NewsVOA.com. 28 July 2008. 19 Sep 2008.
»A new report finds the main problem in getting the public to deal with our fiscal problems isn't opposition to tax increases or spending cuts -- it's their lack of trust in the government to spend their money wisely.