Economics Essay

1821 WordsApr 28, 20148 Pages
The U.S. economy is in a state of disarray. The macro economy is determined by demand, and constrained by supply. The unemployment rate is around 7%; government debt is about to max out, the growth rate of the economy is approximately 3%. Fixing the economy isn’t facile. There is no simple quick fix for it. Fixing the economy will take time, businesses, the public, and the government working together. Many things need to happen to restore the American economy: Monetary policies need to focus on the interest rates, and prices need to be stable in the economy. Fiscal policies need to stimulate the economy, tax cuts need to be put in place to increase consumer spending, address high unemployment rate, and the government needs to spend money more efficiently. There are two goals of fiscal policy which are influenced by each other. The first one is to create demand in the economy this will make businesses want to produce more goods. The second goal is to increase employment. These both can be done by extending the fiscal policy of job creation tax credits and reducing corporate taxes. The first goal of fiscal policy would be to reinstate the business tax breaks. Let businesses get tax deductions for creating more jobs which would increase the growth rate of the economy and reduce the unemployment rate “job creation tax credit should be an integral part of the effort to boost growth.” A job creation tax credit has three goals. First, it creates jobs. Creating jobs is the first step to repairing the economy.” Jobs are the key to a future of opportunity, prosperity, and security.” Jobs bring in revenue for the government and increase consumer spending. “In 2013 personal consumption expenditures was 68.4% of the total GDP.” Second, it reduces the unemployment rate by putting more people to work

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