You Decide Essay

471 WordsFeb 19, 20132 Pages
You Decide The U.S. economy has fallen into a severe and deep recession. The unemployment rate is at 8% and the inflation rate is -2.4 percent, meaning that overall, prices are falling. After discussing this issue in depth with my colleagues and collecting all their recommendations, I concluded the following: I agree with Raymond Burke in lowering interest rates. I believe it will help businesses and consumers to get back on their feet, It will get back the consumer spending back up, and it will encourages entrepreneurs to start up new business and investments. I agree with Allison Tanney in buying bonds. I believe this will increase the money supply and will create a money cycle as the investors will invest their money in bonds and this paid money will help to pay interest for other investors. On the other hand, I do not agree with her on increasing interest rates and the set of reserve requirements. This can restrain lending from banks and as a result it will shrink the economy growth. I do not agree with Kathy Lee on raising taxes and reducing the government spending. Increase taxes my benefit the government by increasing the tax revenue, but it will have a negative impact on the consumer as the product prices will increase and unemployment rate may rise again due to job cuts. Reducing government spending can worsen this issue and reduce the gross domestic product. I do not agree with Patricia Lopez by leaving interest rate alone as interest rates are vital to stimulus investments in the economy. I do not agree with her as well on raising the bank reserve requirements as it can restrain lending from banks and as a result it will shrink the economy growth. After analyzing my colleagues’ recommendations, and as the president’s senior economic advisor, I recommend the following: * We should lower income taxes. This shall increase the aggregate demand as

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