One of the disadvantages of GDP is that it does not tell us how wealth or economic growth is distributed among a country’s population; nonetheless, along with other economic indicators, it is used to develop economic policy intended to improve the lives of people living in the United States. The problem with this practice? Short term GDP can be manipulated by programs such as “Cash for Clunkers” which can generate a short term increase in GDP but cannot generate long term sustainable economic growth nor lasting industrial production and employment.
A better measure of economic growth to set economic policy in the US would be the ratio of middle class real income growth to real GDP growth and its trend over time (by real I mean adjusted for inflation). If this ratio were greater than 1, we could expect inflation; but as the number gets closer to 0, we could anticipate hard economic times ahead as the middle class income growth won’t be able to support or absorb increases in GDP.
In addition, we could also use such economic measure to evaluate the effectiveness of economic policy and could hold government officials to higher standards to make sure taxpayers’ money is managed in a way that generates not only short term increases in GDP, but also, long term economic growth for the middle class. As the middle class income grows, employment will also grow due to consumer spending and everyone -individuals, business, government and non-profit organizations- will benefit because the invisible hand takes over.
Of course, the challenge for US elected officials is to develop economic policy that has less to do with political ideologies and more with generating long term sustainable economic growth that can directly benefit US taxpayers. Can you think of ways to generate long term sustainable economic growth using economic policy?
Tags: Economic policy, long term sustainable economic growth.
There are ways to generate long term sustainable economic growth using economic policy, one such way is to use the ratio of middle class real income growth to real GDP growth and its trend over time. By knowing what the real income amout of the US middle class is you can therefore regulate the intrest rates so consumers/middle class Americans are not getting way to far over there head with mounting debt. This will allow more money in the consumers pocket wich should result in more consumer spending. If the government continues to ignore middle class income and rely soley on GDP then there is going to be some sort of economic problem every 10 or so years like there tends to be. This is why I believe the ratio of middle class real income to real GDP growth and its trend over time would be a more sucessful way to have long term sustainable economic growth.
Generating long term sustainable economic policy is an ongoing political battle. According to the Obama Administration, the “American Recovery and Reinvestment Act” has taken effect in order to save or create 3.5 million new jobs and possibly lead to the development of more businesses. However, if congress could pass a new law maximizing student enrollment for public schools, tax dollars would be forced to be invested in new schools. With the addition of new schools, more jobs opportunities would open. Also, the Y and Z generations population is still rising. Private universities should invest into creating smaller community colleges (with affiliation of the credited institution) for weight-listed applicants. This “sister” school will offer a two-year program for a more affordable tuition rate, create more jobs, as well as raise awareness of the institution e.g. Harvard University’s “Harvard Extension School (though not for weight-listed students). If this is feasible with state-funded schools, then state colleges and universities should also enforce this concept.
One way to generate long-term economic growth utilizing the economic policy is to regulate government spending. More than $620 million dollars were spent in the 2006 fiscal year on “defense”. Although I do feel that protection of our country is imperative, I think this may be a little out of proportion. If this number could be trimmed down to even a quarter of what had been spent in previous years, I think the economy could benefit from generating new job opportunities, such as jobs creating “greener” living environments; such as the “Cape Wind Project” that was proposed off the coast of Cape Cod. The production of these wind mills would have created jobs by, 1) People having to build them, 2) People having to maintain them, and 3) people having to mmarket the resources that they generate.
For our government to stabilize and generate long term growth, we’ll need to increase our government spending. Making advances in our military (although I think it can be rather frivolous) is just one way to do this. Look for new and improved ways to make things, even with less resources. Machine shops that generate alot of these products (and they can’t all be made in the same shop, otherwise people might figure out what the government is using them for) are run by the middle class and then some of the parts are put together by the lower or middle classes that are moving up in the military. Machine shops are starting to se some turn around and this will bring along stability, we just have to be patient and it will come.
Economic growth can be achieved by using economic policy. Economist believe by having technological progress this task may be achieved. By using GDP along with the amount of people in the middle class employed, we would get a better idea of how the economy is doing. Basic economic theories of supply and demand show that when anything rises in price, as occurs with a tax increase, less is demanded. For example as taxes on homes raise the amount of home ownership will fall (Reed Garfield). By keeping taxation down and using GDP and other resources to see how the economy is doing the United States can achieve long term economic growth.
In order for the United States government to achieve stability in a way to generate long term sustainable economic growth using economic policy they would have to look at other countries and the methods they have used to “right the ship.” They also would be well served to pay close attention to the mistakes these countries have made in the past. A great example is the growth model that had been put into effect in Central and Eastern Europe over the last twenty years. Their transition from planned to market economies is not fully complete and it has shown since the world-wide economic slowdown as well as the recent financial crisis. As Radovan Jelasic wrote in the Wall Street Journal (7/20/09)..”Now that just such an external shock has happened, it is time for a re-evaluation of the previous two decades’ growth pattern. For all the trouble it has brought, this crisis is an opportunity to put Central and Eastern Europe on a more sustainable growth path.” Reforming pension, restructuring tax distribution and healthcare and education resolution are just some of the things that these collective countries are looking at in order to right the ship. In conclusion, I will say that learning from your own mistakes as well as others is the best way to reach a viable solution.
The the US government has succeeded in providing the economy with an increase in short-term GDP, thanks to “Cash for Clunkers”. However, no actions have been taken towards sustaining a long-term increase in GDP. I think it would be a step in the right direction if we could improve the country’s welfare system and use the stimulus budget to create more jobs.
It is a shame that a good portion of American’s taxes are put toward supporting the welfare system. It only enables people to to live without working and provides them with an easy alternative to get what every other citizen has to go out and work hard for. I’m not saying that some people don’t actually need welfare because some people are disabled and very unfortunate at times. The problem is that we have people abusing the system and staying on welfare for their ENTIRE life and taking money from the government and hard-working Americans.
Some actions that can be taken are to look more closley at who is going on welfare, whether or not they are actually in need of it, and allow it for only a short period of time. This is fair because it would help those in need of assistance to get back on their feet and try to find a job. And with this money saved, we could put it towards creating more jobs as well as using the stimulus money to do the same. This would employ more citizens and the people who were not working before would now be forced to find jobs allowing the middle class to become larger. It would take a substantial amount of time to achieve a long-term increase in GDP, but I think it sounds fool-proof.
I think the ways to generate long team sustainable economic growth is to cut down government spending. There seems to be a need for more social programs or more defenses spending each year, and thus the deficits continue and add to the national debt. According USA Today has been say that Government spending totals $649.52 billion, a 7.2% increase from the same period a year ago. That resulted in a deficit for the first three months of the government’s budget year of $119.31 billion, up 1.1% from the same period a year ago. Absolutely, this is the big amount of money that government has spend, so I believed if government could find the best solution to reduced the unnecessary spending it would be help the economic from the recession situation to be better in the future.
One way we can generate long term sustainable economic growth is to cut back on welfare and put this money to more productive uses, while at the same time, putting more people out in the work force paying taxes. According to Robert Rector of the Heritage Foundation, in fiscal year 2008, government spending on welfare totaled $714 billion. According to Obama’s budget projections, it will total $10.3 trillion over the next 10 years. Mr. Rector’s report also shows that welfare is now the third most expensive government function. This is just one way I believe we can generate long term sustainable economic growth.
In order to generate a long term sustainable economic growth in this country the most obvious way is to create employment opportunities. The Obama admistration stated in the White House website that the economic stimulus package with elements that includes modernizing federal infrastructure, increasing alternative energy production, improving education, investing in science research and technology as well as helping small businesses is aimed at creating millions of jobs across the country. The state aid helps keep them from having to either raise property taxes or cut needed services, which also saves jobs. Improving the federal infrastructure would mean lower transportation cost for the consumers. With the implementation of the stimulus package I am convinced that the country will experience long-term sustainable economic growth.
I think it is possible to generate long term growth in the US, using the so controversial and recommended “stimulus package”. I believe it is possible as we start witnessing changes towards re-employment and lay-offs. The short term “stimulus package” is right know the only remedy as it provides a great relief. I also think that cutting taxes have demonstrate to be an effective way to improving the economy incentives. According to Reed Garfield, a Senior Economist “The way to improve the economy is by returning more control of the economy to private citizens. The simplest way to accomplish this objective is a tax cut. The history of the American economy demonstrates to all observers the importance of low taxes. Low taxes coupled with reduced government spending and lower regulatory burden is the surest path to improve our long-term economic growth outlook”. The best way to generate a long term sustainable economy is by cutting government spending and using it for what’s really needed, generate jobs and start re-employing.
I think that there are many ways to generate long term sustainable economic growth in the US. First of all we need as a nation to stop spending billions and billions of dollars on our military budget. So far the military budget request for fiscal year 2009 is requested at $515.4 billion dollars (wikipedia). Military is important to us in this country, but the spending can be cut down enough to still maintain a high level of research and development for our defense. The money that could be cut out of the budget from the military can be used for rebates to help small businesses thrive through these difficult economic times.
Its my opinion that the United States shoud take a look at goods and services that are outsourced to other counties and see of production of those goods can be done within the United States. The US and many companies outsource many services and product manufacturing services that could be done within the US. Services such as after hours customer service represenatives that work for credit card companies or computer companies could hire Americans to perform that task locally. With more companies keeping those services ‘inhouse’ it would put Americans to work and thus stimulate the economy and make work available for many citizens. This is why I feel that bringing services such as the above home to the US could possibly stimulate the long term economic growth of the country.
I can think of several ways to generate long term sustainable economic growth using ecnomic policy. One of which is increasing jobs for unemployeed Americans; thus it will help out the economy when the rate of unemployment decreses. Another could be to set interest rates higher than now. It doesn’t sound like a great idea now but it would certainly help the US stabilize finances in the long run. Also as others have said before me, cutting down on military spending would increase the money supply and make it easier generate long term growth. Spending unnecessary money is a foolish to do during these hard times we’re facing. These are a few ways I think the US could generate and save money.
Of course, the challenge for US elected officials is to develop economic policy that have less to do with political ideologies and more with generating long term sustainable economic growth that can directly benefit US taxpayers. Can you think of ways to generate long term sustainable economic growth using economic policy?
With the whole “cash for clunkers,” I personally think it was a bad idea. Now after everyone is out buying new cars the industry is just doing to fall to the ground. I think the best way to create a long term sustainable economy is to create more jobs. In creating more jobs this would increase the size of the middle class. I think the government spends money on things that are not needed or they don’t need to put as much into it as they do. For example the military, yes they need money but not the millions and millions they are putting into it. Also taxes, I do think it is a good idea for everyone to be paying taxes but honestly, where is all that money going? They say the roads, lights, etc. but where I live, I believe that to be false! Also I think the government needs to take a closer look at who is on welfare and if it is really needed or not.
When looking at the United States Economy today, i feel that it is vital to find new ways to generate long term sustainable economic growth using the economic policy. In an article written by Tim Kane and Rea Hedermanm of the Heritage Foundation, one way to increase economic growth would be a smart tax policy. “This evidence has been particularly evident since mid-2003 when the Bush tax cuts were passed by congress; these cuts created strong incentives for investment, which in turn spurred the American economic engine”. In another article also on the Heritage Foundation, Daniel J Mitchell also states that there is a big argument over government programs. While bigger government argue that they offer valuable “public goods” such as education and infrastracture, smaller businesses argue that government is to big and that higher spending undermines the economic growth by transferring additional resources from the productive sector of the economy to government, which uses them less efficiently. They also warn that an expanding public sector complicates efforts to implement pro-growth policies—such as fundamental tax reform and personal retirement accounts— because critics can use the existence of budget deficits as a reason to oppose policies that would strengthen the economy. Too much money is spent on government programs. I feel that there should be a way to cut down on social programs and military operations, and still keep the country safe, keep the social programs strong, while continuing to look for ways to generate long term economic growth for the country.
One way to benefit most US taxpayers is to increase wealthy people’s tax rate, giving the government more money to work with. An article by Jeff Heaton explains how this has created a Sustainable Economy in the past, “In the 1950s US tax payers with an income over $3 million a year (adjusted for inflation) paid a federal tax rate of 90% the wealthy were forced to reinvest all of their income back into their businesses; or give their profit away to charity; or give their profits back to the government. The result was the longest economic expansion in history. Of course most wealthy individuals will respond to higher taxes by reinvesting their profits back into their own businesses while curtailing investments in risky financial markets. The end result will be a huge boost to the middle class” This may not seem fair to everyone, but it is a good way to generate long term stainable economic growth.
There are several different factors that can help generate long term sustainable economic growth. One way is to cut back on government spending and keeping tabs on state and local government budgets. Another is to limit unemployment and lobby for stronger unemployment insurance. This would help the economy grow and would be a plus for middle income Americans according to Mr. Stiglitz of the New York times.com. Another is prevention of foreclosures. Joseph Stiglitz also said “spending money to try to prevent foreclosures, whether that’s part of TARP, or a successor to TARP. That would be foreclosures among lower-middle-income people … which would help stem the financial crisis.” These are ways I would personally use to have a sustainable economic growth
The most controlled way to stimulate long term growth of the economy is to create jobs in stable markets. In order for there to be an increase in consumer spending and disposable income people need to have steady employment which will slowly grow the economy. The target markets to increase employment would be areas such as green energy, technology, homeland security, and computer technology because these are areas that are going to continue to grow and evolve over time. Another way to recreate employment in the US in order to grow the economy would be to bring back some of the manufacturing that has been outsourced overseas which will in turn grow the American wealth. Employment is the only way for long term growth for the simple fact that without income there can’t be consumer spending which is what drive the economy.
Long term sustainable economic growth using the economic policy can be obtainable by the government specific policy proposals to promote long term economic growth. Microeconomic and macroeconomic reforms are essential to these goals. Regarding microeconomic reforms, the government have to put in place a comprehensive reforms that affect the men and women on the main street to wall street, example are the issues of housing and forclosures, curbing unemployment is essential not only for tax revenues for but for consumer spending that drives other economics activities for manufacturing industries.
New technologieis and production processes could alleviate many of the most daunting problems that forestall the long term economic growth that US economic badly needed.
Another factor the could help sustain our long term economic growth is the USA trade deficit to China and other foreign countries have to be curtail. We have to start spending more on export goods than we make on import goods .
I believe long term sustainability can be acheaved by creating an open job market for people to actually work and make a living. Because if every one had a job they would be able to purchase items in witch it creats a demand for the product. So that means people would be hired buy these companies to increase there production. Not only that but if we brought back most of our outsourced jobs the unemployment rate might go down.
The United States can’t generate sustained economic growth until it enacts economic policies that will help it move away from a consumer driven economy back to a production based economy. Policies that would nurture key companies and industries that have a potential to become big exporters. We also need policies that would create economic fairness with our trading partners, policies that would drive up the price of goods produced in a country that doesn’t have a respectable minimum wage or labor unions. Only by enacting these changes can we heal our warped economy into an economy of production and human capital thus a sustainable economy.
I want to believe that there will be substantial economic growth in the U.S. Honestly; I really don’t know which way to go with this one. According to, The Wall Street Journal, they have documented the GDP for 2009 Q2 to be -1%. As for 2010 Q2, it states the GDP to increase to 2.8%. This is hard to understand considering the employment rate in June 2009 is 9.4% The chart estimates that in June 2010 the employment rate is going to drop down to 9.8%. So, if the employment rate continues to drop, how does the GDP increase? In my opinion, the GDP is not going to increase due to the unemployment rate. The easiest way to track the economy is to keep track of the unemployment rate. People can’t spend money that they don’t have. The only way for them to have money is to work. So, this is why I will never really know what to think of the economy. Every day is something new.
Even though “the recession is likely over”(Ben bernanke, Federal Reserve. 9/16/09) , the U.S. is still on a downward spiral due to the billions of dollars spent on bailouts, the amount of homes foreclosed in relation to these bailouts, and the threat of the Swine Flu, which has now been announced as a Phase Six Pandemic ( the highest phase) by the World Health Organization.
The idea to pump billions of dollars into the economy to save corporations will go down as one of the worst plans in the history of the U.S. economy because it is not beneficial to GDP and it is Unconstitutional; That is, this economy is not a free market if it does not allow companies to fail and by bailing them out and artificially propping up the economy with billions of dollars, the flow of our whole economy is ruined, when I think that if these corporations were allowed to fail, we would have had an economic collapse, but a collapse that was repairable.
As of September 25th, according to Propublica’s “Eye on the bailout”, firms are still buying up mortgage loans from banks (GMAC is talked about in particular: 25.9 Billion). This allows these firms to offer too good to be true offers such as no-down payments on very nice homes, when in reality the growing interest rates provided to consumers will rise and over the next couple years leave citizens homeless due to foreclosure and will greatly affect GDP; I think this should be of great concern.
Last, I believe the Swine Flu (H1N1) will “ hit hard” or be made appeared to hit hard, so that whole counties will be quarantined without notice, and also possibly under martial law (the system of rules that takes effect when the military takes control of the normal administration of justice), which will be exaggerated for just that- martial law, with the constitution temporarily suspended, the economy will take another blow.
Overall, I believe we are beyond the tipping point and the only economic policy that will succeed is allowing transparency to the citizens and not hiding just how bad the economy actually is, and I think before any long-term sustainability to our economy and economic growth takes place, this artificially propped up economy based on inflation and perpetual debt might lead us into a much deeper recession, if not depression.
Some ways to bring economic growth to this country can be by cutting back on some of the government spending. For example well fare, the government should try to follow-up on some of the cases because some people are always trying to fool the system. Also make better decisions on what should get cut back for example fire stations, and police stations should not get cut backs. For the reason that when the unemployment rate is high there are more possibilities of people committing crime. Another form of economic growth can be by investing in technology and also by finding ways of being less harmful to the environment. Those are some ideas that can help bring more jobs to this country and help the country’s economic growth.
I believe that long-term sustainable economic growth would help prevent another recession and help with unemployment. There needs to be a economic plan that will provide people with permanent jobs, businesses need to be responsible for there own economic well being and there needs to be security in the market. Some of these things are not predictable or even secure while in a good market but there is a way to make more jobs available to replenish the economy. If the bigger companies provided job opportunities for the people without a job or offered jobs back to their employees previously laid off then less people will be relying on the government to survive. Also if the government used their money to replenish companies that were not going to crumble but could have used some money to keep all of there employee’s employed then it might have helped more than the government giving all their money to companies like GM that needed more than should have been given to them.This is what i believe needs to done to increase long-term economic growth.
Ways to generate long term sustainable economic growth using economic policy does exist. In Wall Street Journal President Obama have stated “the administration and Congress should consider raising taxes on Americans…”. He believes taxing will solve the problem of the economic growth. The real problem is people are still spending way too much money on useless things. Spending should be something you can control and manage. To spend money, we must have a job. The job loss in the U.S. still continued in September. There should be more job openings than people losing jobs. Another article from the Wall Street Journal is “gross domestic product decreased at a 0.7% annual rate in the second quarter”, and now they are saying recession is over. It’s not over until we see unemployment rate gets better. All in all there are way sustainable economic growth use economic policy.
There are ways to generate long-term sustainable economic growth using economic policy. I think the most important way to generate long term sustainable economic growth is to stop sending troops to another country for long time, which takes lot of money to feed them. DAVID LEONHARDT said in an article in the New York Times “Most of that $15,000 is deducted from people’s paychecks, as taxes or insurance premiums, before they ever have a chance to spend it.” The other way is to lower the taxes in order to have people spend more money on things, which would create more jobs for people making the merchandise, because people will purchase more things than before. I think the other way to keep economy stable is to move the jobs from outside of U.S.A. into the country. This would create more jobs for the people who are unemployed at this time in this country and this way they can generate the long term sustainable economic growth.
One way to generate long term economic growth by using economic policy would be to cut back on government spending. The government has spent over billions of dollars on the Department of Defense. I understand that our country needs to be protected. However, the question is, at what cost? Why does the government have to spend 50 thousand dollars on one bomb? Would it be better to spend billions on a military force knowing that it would impact the country financially to a downfall? How is that better for the people of the country? The government has spent about 700 billion dollars on health and human services, but they also spent about 650 billion on the Department of Defense; that’s more than three quarters of what they spent on health and human services. Another way to generate long term economic growth would be not to let social security, medicaid, and medicare services grow. I’m not saying to completely eliminate it, but the bigger these health services grow the more money the government has to spend to fund them. Due to the baby boomer generation, “the cost of these programs will leap from 8.4 percent of GDP to 18.6 percent of GDP which is an increase of 10.2 percent of GDP, in the coming decades.” The government should limit the amount of money they are giving to people on government assistance.
One idea for sustaining long term Economic Growth in the United States is working on this ever-consuming illegal immigrant issue. Approximately 20 million illegal aliens are living here in America (CNN’s Lou Dobbs, 2005), and approximately “4 million [more] a year” (Sen. John McCain). We need to figure out a way of securing our borders. Though we have a closed border policy, does not mean it is tight. After much time spent researching, I have read many articles claiming illegal immigrants cost somewhere near $338 billion dollars annually, it is very hard to find a definitive figure however. But I have found that “Illegal Immigration Costs California Over Ten Billion Annually” (usgovinfo.com). “Illegals cost Texas $4.7 billion” (wnd.com). I was unable to find a figure for New Mexico though, which is extremely populated with illegal immigrants. This is not including Arizona, Nevada, Utah, and all the other states. I realize this is an ongoing problem, and the search for a solution seems impossible. This would open so many job offerings too, especially now where our economy is bruised. But with a solution, along with possibly decriminalizing marijuana across the country could save us billions of dollars, billions. There were almost 900,000 arrests in America in 2007 for possession of marijuana (drugwarfacts.org). Possibly taxing marijuana too could actually help the government MAKE money.
There are many ways to generate sustainable economy growth, but the most important way is to create a program to reduce unemployment. We already know that GDP has increased lately, but unemployment still rising at the same time. Unless Unemployment rate decreases; we will still face a hard time. Furthermore, following at two-day summit in Pittsburgh, Pennsylvania, leaders from the Group of 20 (G20) countries tried to lay groundwork for a sustainable, balanced global economic growth. In addition, G20 leaders ruled out any short-term strategies, saying that they agreed to maintain the current stimulus measures to support economic activity until recovery is fully assured. They also agreed that “In the short-run, we must continue to implement our stimulus programs to support economic activity until recovery clearly has taken hold”. For all these reasons I believe controlled stimulus packages would help consumers spend more, and therefore this would generate job opportunities as well.
Can you think of ways to generate long term sustainable economic growth using economic policy
For the United States, long term sustainable economic growth is a problem. Through economic policys there are certain ways in order to overcome this problem. But first off, i dont believe there is going to be any economic growth untill productivity increases. Once productivity increases then thats when the government needs to set a period of time where there is loow taxes. If the middle class is taxed at a very low cost there will be more money in the pockets of consumers. Therefore the goals of the producers will be met because consumers will once again have money to consume. The problem is everybody is fixed on the idea of saving money. When poeple save their money they obviously aer’t spending it. Therefore the economy weakens. In 1962 during Kennedys precidency, his administration induced a series of large tax cuts. According to the “Joint Economic Report”, during the tax cuts in 1962, investment grew at an annual rate of 6.1%. If the government is able to give another series of tax cuts, then i believe we can get the investmant rate up once again. Once the consumers are spending money again, the economy will fix itself. I believe tax cuts would be the best way to attempt sustainable economic growth here in the United States.
How could long term economic growth be generated?
If there is such a way, I believe that it would not be easy and we should expect to have to make some sacrifices. I think that the problem is, we want to change and to all be able to live better lives, but we are neglecting to see how such a change means to alter our very way of life. If we look at where all the money is going, and where some of it is disappearing, we see that critical changes are to be made. What if the billions of dollars spent on the war was used to invest in colleges and post-high school education? Maybe we would all have free college and didn’t have loans to worry about. Who knows? In a Washington Post article, some economists projected that the war would end up costing us about 3 trillion dollars. That’s a lot of money.
I think that for long term economic growth, our government needs to take a step back and look at the world through the eyes of an American who is struggling to make it when it seems that so many people in the same country are living the good life. A change this big would take a lot of dedication from not only the rich, but from the poor as well, who will have to keep grinding away at work everyday, while the people on top are making the important economic decisions.
I would like to give a more clear and definite answer, but I can’t imagine how one change in economic policy will give us such a drastic change. Whatever the solution may be, it will take a long time because any kind of long lasting change takes a lifetime of work.
The U.S. officials have their work cut out for them in sustaining long term economic growth. There has been too much money that was spent on our military over the past few years and on our welwafre system putting the U.S trillions of dollars in debt. The officials in charge need to start simulating the economy by increasing their disposable income. They can start by changing the tax rates, and help U.S companies out before worrying about other countries and outsourcing. If the government wants to see a change in our economy they need to take a step back and look at other ways to spend their money.
In order to maintain the long term sustainable economic growth cutting out work is not the right way. The govt. should spend less and gain more. If the govt. wants to sustain long term economic growth they will have to look at the three main factors: GDP, Unemployment, and the Govt. expensed. GDP and the Unemployment rate indicates the economy of the country. The WSJ projected that the US growing economy is going to reach +2% by the end of Q3, but the unemployment rate is projected to be almost 10% by the end of 2009 which indicates a bad economic growth. On top of that the govt. expenses are higher than we can afford so, cutting down on work isn’t going to do any better if the govt. expenses are going to be at the same rate. Including that the consumer spending is low which indicates low tax for the govt. Therefore, the govt. has to increase the GDP rate and lower the Unemployment rate and the consumer spending should be maintained above the 0%, then we will have a long term sustainable economic growth.
Can you think of ways to generate long term sustainable economic growth using economic policy?
A helpful way of generating long term sustainable economic growth for the US would be to regulate government spending. Without the regulation of government spending we will have difficulties stimulating the economy. The federal government cannot spend money without first taking that money from someone.”We’re on an economic tightrope. The package that passed the House is a huge increase in the amount of government borrowing. And we’ve borrowed so much already that if we add too much more debt, or spend foolishly, we could invite an even bigger crisis.”(Mitt Romney). The government has already started spending money it does not have and has just passed a bill to let it continue on without the necessary funds to continue. With time running out, Congress on Wednesday passed a stopgap measure to keep the federal government operating for another month while it struggled to finish nearly a dozen overdue spending bills.(NY TIMES).The continuous spending and lack of stimulation of economic growth shows signs of long-term economic problems.
Finding a long term sustainable economic growth using economic policy is right now the most important and most difficult problem the US needs to solve. The US cannot continue to depend on the GDP because it doesn’t really tell people if if the economy is actually growing. The economy the US is in now is based on a fiscal burden and crowding out which is obviously not a good sign to make things better so the US should be concerned on Middle class Americans income because that is where are the consumer spending is coming from. We need to find to decrease the unemployment rate to decrease to regain more consumer spending. there should be less government spending and a tax cuts for a long term effect.
Considering that generating sustainable long-term economic growth in the US is not an easy, quick task, i believe it is not possible. There is a Climate Bill in the process of being passed which is said to reduce greenhouse gasses in sort of a “cap and trade system”, as H. Josef Herbert reports, that “would cause the economy, or GDP, to be a quarter to three-quarters of 1 percent lower in 2020 than it otherwise would be.” (Estimated by the Congressional Budget Office). Seems like a beneficial plan until hearing that the gas emissions by 2050 would have to decrease by 80 percent for the GDP to possibly rise 1 percent. Even the 1 percent increase is not assured, so is it really worth it? In order for there to be a real change something else needs to be done that has not been discussed yet.
Long term economic growth seems to be some sort of dream scenario to me at this point. I feel like whenever we see a small step forward in improving economic growth, within a few weeks we take a bigger step back. I think this time we as a whole country have dug ourselves in a really big hole and its going to be a hard fraught battle to clime out of it. To turn things around we are all gonna have to work together as a whole country to turn it around. I feel like if all the American made car industries can rebuild and redesign there vehicles to rival the quality and gas efficiency of the foreign cars, it would give Americans more jobs and keep more American money in America, thus improving our overall economy and GDP.
i think yes that generating sustainable long-term economic growth in the US. it’s possible if the all the political men think for whole nation. Right now it’s very diffecult for the people who are unemployment and people who dont have job. The government should look at the unemployment, GDP and how much they spending. They should higher the tex for who make more enough money. They should pull the troops out of the afganistan and stop giving out money to big companies. I think that govenment should start the opening new company. That’s way it’s open the jobs and the decrese the unemplyment rate. we only hope that it’s will happen good in future.
Ways to generate long term sustainable economic growth would be to cut broken government programs such as welfare. This program is the third expensive program in the country;Its costs rank above spending on national defense. In the article ” Obama to Spend $10.3 Trillion on Welfare” on “www.heritage.org”It has been reported that President Barack Obama will increase the spending for the program in the 2010 fiscal year. If government cuts welfare and endorse the funds in more towards the military, this will encourage poor class to escape poverty and move up to a better class. By doing this many Americans will be employed, many families will have health-care coverage and this will also build their resumes once Americans will be in search of other careers after serving the military. In other words, if government doesn’t want to contradict themselves stating “we want Americans working again” they should not provoke unemployment by providing free monies that can take away a person’s drive to become more productive for themselves and for our country.
There are many ways to generate long term sustainable economic growth. One that comes to mind is consumer spending. I think consumer spending need to increase. With increase in consumer spending that will produce more jobs. And more jobs would decrease unemployment rates. As stated in the Wall Street Journal. In the past consumer spending has helped buoy past recoveries. Also stated by the Wall Street Journal, just in the last 18 months the recession has eliminated almost 3 and a half years of job gains.
One way to generate long term sustainable growth is to participate in trade liberalization, which is the removal of or reduction in the trade practices that thwart free flow of goods and services from one nation to another (www.businessdictionary.com). In the article “It’s the Trade, Stupid” by Susan Segal found at http://www.as-coa.org, Susan writes, “Unlike quick-fix stimulus programs, trade is not a one-time boost for the economy. Rather, it provides multiple economic benefits in both the short and long term.” She gives the statistic, “During the 2003-07 period 32 states exhibited above-average export growth with 22 of those states also having above-average manufacturing employment growth.” Trade liberalization would generate long term sustainable growth with economic benefits including job growth and export growth, and it would not increase US taxes.
There are a number of ways to generate long term sustainable economic growth. The tax rates should be lowered. The reasoning for this is because 70 percent of consumer spending is from the middle class. If the taxes were to be lowered, we as the middle class would spend more and waste more money which betters the economy. According to Stephen Labaton from the New York Times, the plan that was proposed by the FDIC to ask to lend money to the insurance fund so that the banks would have to prepay their annual assessments that were to be due b 2012. This would bring supposedly $45 billion to the banks so that they could recover. Overall things like this would help the economy grow.
I believe the best way to generate a long and sustainable term of economic growth in this country, would be to create more employment opportunities, and cut down government spending. Without an income people are not going to spend their money! If jobs are created that can give middle class people an opportunity to work an earn money, then people will spend and show a slow steady rise in GDP. Also cutting back on the government spending and put more money towards new schools. If more people can be educated in special areas than new jobs can be created! Generating a long and sustainable term of economic growth is a battle no one can seem to get a grip on, but I feel more jobs and educational opportunities will greatly help.
Today’s economy, though very different than it was following the Great Depression and World War II, can achieve long-term sustainable growth using the same tactics. Research and development funding exploded in the 1930s, creating huge innovation waves in electronics, nuclear power, communication and computing. President Obama can use this same approach by federally funding the research for new innovations and new industries, such as energy technology. This is an emerging industry that has the potential to create millions of jobs throughout the United States. In order to do so, the government must provide the advanced technological equipment and state-of-the-art laboratories necessary to achieve the goal.
Although generating a long term sustainable economic growth is not an easy task, I believe that it can be done by decreasing social spending expense. According to a federal government spending report, social programs take 14% compared to the 5% for defense. If this wasn’t such a big expense than we wouldn’t have to raise taxes and the middle class would have more money to spend. Social security being one of those social programs, is showings signs that it’s going to be a failure. Although changing social programs would greatly impact the nation it is something that needs to be changed for the economy to have stability.
Total Government spending is close to 650 billion dollars, reducing Government spending could lead to long term sustainable economic growth. Welfare can be very beneficial to some U.S citizens; however some take advantage of others generosity and receive welfare when it is not necessary. In 2008 the Government spent 714 billion dollars to support welfare. It will only rise in the future due to job lay-offs and the declining economy unless action is taken. A possible solution would be to put stricter regulations on the accessibility to welfare, narrowing it down to the citizens who cannot survive without it. I feel that there would be a great improvement if the money spent on welfare was reduced it would free up funds that could be used for other economic issues. For instance supporting research for ‘greener’ projects such as more efficient transportation or alternative fuel projects.
Is long term economic growth sustainable in the united states of America? The fact that research technology progress and economic growths are closely linked is beyond dispute. However there is still a debate over which strategy is best suited to deploy to untie resources and technology transfers. A useful starting point is the observation that major disruptive inventions which changed the course of industry. Or the world as a whole. Research according to john erelius managing director of garching innovations, which organizes technology transfer from the mark Planck institute to business in Germany. Research may become an important platform for technologies of life sciences. surveys during the past 2 decades, support arguments for example 44% innovative products were derived from basic research. for the united states of America to sustaine economic growth it must invest more into research and development and manufacturing in this country and less from outside sources. We need to be a country of producers and buyers, to sustain economic growth.
Cutting down on the spending for US defense is one of the ways for US to start a long term economic growth. “The budget for US defense in this year is over $800 billion dollars. The government should slow down in spending for the so called defense for the country, instead they should start turning their focus on our crumbling economy. Trimming the budget for our military funding in half and putting that money on something that will help make the economy better. It is just one of the strategy to help start generating a long term growth.