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.
Employers and worked are all under stress and have a lot to deal with. According to senior economist of Center for American Progress, Heather Boushy, emplyers should offer their employees flexible hours and more time off to accomodate thier families. Families are struggling and they do not see their families enough. It is worse when someone is laid off because the way the economy is these people are not getting the money and more homes are going into foreclosure. The foreclosures are surely not helping the economy is any way. Some employers are laying off due to being a little slow but if they gave their eomployees more fleixible time and fewer hours they would be able to save over time.
There are numerous ways to create long term sustainable growth. Some are obvious and others are not. For instance there is a substantial amount of cash that is wasted from the Federal Government each year and every president from each party always insists they will be the ones to stop it, when at best they minimally reduce it. These millions and billions of dollars are landing in useless hands of special interests and not in the hands of programs that would help in stimulating the economy. Unfortunately the politicians on Capitol Hill continue to throw around the money as if it were monopoly money because they feel no pressure from the voting public to change and when they do the pressure is minimal because they face no action.
Other solutions unfortunately require politicians taking action also. The economy in a sense is a wheel that spins and one thing triggers another and so on and so forth. Programs such as welfare are necessary but they are constantly being taken advantage of. A chain reaction of events would be as follows, the government actually walks the walk with ridding themselves of wasteful spending, putting more money in the hands of the tax payers, allowing the tax payers to spend more both at home and on retail, Thus allowing businesses to grow and spurring on rapid development. To me that answer is very basic and elementary but in my opinion that is the medicine that fits the sickness.
We are in a critical situation; America’s economy depends on the cash flow. Actions such as raising taxes, will only keep people from spending money, bringing down production, and consequentially hurting employment. The market needs to target two mains groups of spenders, the Boomers and the Tweens. Having the Boomers and Tweens spending money, will put the X group back into the work force, having the X group back at work and paying taxes the economy will start to improve. Also with the X group back at work, they can support the Y group, who are the children of the X group. When the Y group have help from the X, the extra money they make is spent in one way or another, also putting it back into the market, therefore maximizing cash flow and putting America back in its feet.
I think that the biggest thing that needs to happen is people need to find jobs. There has to be a away that the government can create jobs for people. One way of doing that is making education more affordable. Many of the excuses people have for not going back to school to get a better or any job is because they can’t afford school. If the government could make a program that gave scholarships to unemployed people to go to school while still getting unemployment checks, then more people would have good paying jobs. Another to create jobs would be to hire more people at warehouses and factories. That way it works out for everyone. The workers have more money to spend on the products that other workers are making. Then the companies have more revenue to pay the employees that they hired.
Mountain ecosystem services help provide long term sustainable economic growth and job development. As Americans we should try to use more environmentally safe products such as electric cars. If we do not limit our oil based resources then our economy will not achieve stability, and will spiral downward. The government needs to put better use to its spendings. Our tax dollars should go to a productive cause such as bettering our enviorment instead of providing money for weapons to be used in the military. According to the War Register’s League pie chart, about 36 % of income tax gets used for military purposes. I think this percentage should be used for a better cause such as lowering the cost of electric automobiles, or providing more community service jobs.
Offhand, one way that we can increase long term sustainable growth through economic policies is by increasing federal funding for research and development. According to Susan Hockfield, president of M.I.T., “Innovation-based industries arising from scientific research have been central to the remarkable rise in US living standards … The federal government must now make research investments that will put the nation on the road to rapid long-term economic growth.”* There is also a history of technology rousing the economy. From the government funding of new wartime technologies in the 1940’s that led to advances in computers, nuclear energy, and aerospace that had led our economy for decades. To all the advances in computing and information technologies in the early 1990’s that led an economic boom. With whole new science fields such as biotechnology and green energy the opportunity to ignite the economy for the long term success through funding is there.
There are many thing that we could do as citizens to help the economy. Without changing my current schedule I help boost the GDP. I usually work about 15 hours a week and use the money I earn to spend on things. If I work and spend my money the Invisible Hand effect takes place, and our government collects the taxes. If everyone keeps working and spending the economy should improve
There is no question that US officials need to develop a long term sustainable economic growth plan. But how? Many say is taxes, but I say we need to find a plan to develop more jobs. I believe that instead of giving out work visas which yearly is given out a minimum of 140,000 to anyone that asks for it, give the jobs to the unemployed here in the United States, which according to the Bureau of Labor statistics is up to 9.7% for the month of August. In the end who knows what will work but we can’t just be making short term economic growth because it will get worse.
I believe that one way to generate long term sustainable economic growth in the U.S. is by generating new businesses. According to the President Barack Obama “small business are the heart of the American economy “as he stated on March 16, 2009 on the White House’s website at http://www.WhiteHouse.gov. According to the President “small business are responsible for 70% of new jobs created in the past decade. Therefore, the government should be giving entrepreneurs loans to generate businesses which will create jobs. For example, even though the cash for clunkers program didn’t create new businesses it kept people employed. The government took money out of the stimulus plan for a rebate on consumers to trade in and buy a new car. By investing in that program, we saw sales increase due to the program. Even though that was short term, I believe that if the government issued loans for entrepreneurs to open small businesses, it would have the same effect, but with long term results with the US economy.
I believe that in order for the GDP to show actual economic growth, there needs to be consumer spending. Without consumer spending, there wont be any sustainable economic growth that would lead the country out of the recession. In order for that to happen, the government needs to fund programs that would generate jobs for middle income families that lost their jobs as well as recovering some of the income lost over the past 10 years. While people recover their jobs and spend money, the companies that had to downsize and lay people off will start to rehire, further decreasing the unemployment rate, giving even more people higher spending. With that situation improving, the economy would start to stabilize and eventually start to improve
One way to create long term, sustainable economic growth is by making state colleges, technical institutes, and colleges with multiple locations around the country free. With these free, millions of students will be free from debt and will be able to purchase much more goods during those years in college, which would stimulate the economy. Not only that, but this would also allow more people to attend college, such as those who can not normally afford it, and allow them to get respectable jobs to earn enough money to buy more goods. Though the price for creating free college would have to be paid by increased state, federal, and maybe property taxes, this would still benefit everyone in terms of education and a chance at higher paying jobs so taxes shouldn’t really affect the people’s spending. This is why I think that a good way for creating long term economic growth is through free college.
Sure new business opportunity’s with help from the government could create jobs, but there is a bulk of the teenage population that are considered unemployed, but are not even looking for jobs. According to the NY times teenagers looking for jobs and not finding one this summer was 25%. So, 1 in 4 teens were out of work this summer. What about the number of teens not looking for jobs? If ever young adult where actually in search of a job this may push the numbers lower, giving more people money to spend therefore slowly increasing GDP.
There is so many people unemployed and the people that are employed are the ones paying for the high taxes. If we can make more job opportunities then I think that taxes would go down and be more spread out through the middle class people. A growth rate of 2.5% will double the GDP within 28 years and if there is a growth rate of 8% then there will be a doubling of GDP within 9 years. We just need to make more jobs for the people that are unemployed which I would think some of those people are going back to school to refresh or get a degree and some experience because you need it know to get anywhere in this world.
The govenment in order to generate long term sustainable economic growth using economic policy would have to use the ratio of middle class real income growth to real GDP growth and its trend over time to better measure economic growth. This will help because if you know the income of the middle class you can control interest rates and taxes so the middle class don’t get too far into debt. This will put more money into the middle classes pocket to put back into the market to bring back up the economy. If they do not do this there problem will continue for quite some time and the economy will still be in a recession. This is why i think the government should use the ratio of middle class real income growth to real GDP growth and its trend over time to better measure economic growth.
I think a new way to create sustainable economic growth is to find alternative sources of energy to make living cheaper for everybody. One way of doing this is to further harness wind, sea and sun energy in the least expensive ways. These companies may need to be run by integral people. With energy prices lowered from people spending 100 plus dollars a week on gas, they could spend that money and contribute to the GDP. Investing in these companies would also help the stock market. According to the “Joint Economic Report,” investment grew at an annual rate of 6.1%. I feel this could really help the economy.
I believe that long term sustainable economic growth is sooner than people think. If the U.S can spend some more time focusing on unemployment, the economy will generate more revenue, because more people have money to spend. Now, its a complete 180 degree the government is spending so much money on other things. Therefor the economy is not doing so well, businesses are laying off more employees, and unemployment continues to grow. For a long term sustainable economic growth people need jobs, in affect will maybe one day not lead to the highest unemployment rate in the world right now.
Longterm substainable economic growth is possible in the US.We need to increase entrepreneurship because most jobs in the US are created by entrepreneur.According to Forbes “job are create by IBOs (independent business owner).Acording to the NY times”US government spends 31 billion dollars on on Iraq in just one month”.Our denfense buget needs to change aswell we need to find a better strategy.In conclusion,we can have substainble growth in the economy if we just make some major changes in our buget.
I believe there are some ways to generate long term sustainable economic growth using economic policy. Economic growth can be achieved by “companies produce more hence they will need to employ more thus creating jobs in the economy. The profit motive that companies pursue will force them to develop technologies that will produce goods at a fraction of the cost. Entrepreneurs will enter the market place due to the potential opportunities. Disposable incomes will increase as companies produce more to make more profits, hence wages and salaries will also rise. National incomes will rise giving citizens the ability to purchase more thus further stimulating the wider economy.” That is the simplest way to put it and it shows that if you jump start production of goods, employment,income, and purchasing of goods will rise and costs will go down. Unfortunately with every boom in the economy, there is a crash, which I believe is unavoidable.
Seeing as the middle class is the heart of the economy, economic growth will rely on reviving the middle class. Jobs are a major factor, and we should mend economic policy to fit our needs more effectively. Long term tax incentives for small business that enlarge their workforce would be a start. Tax penalties for companies that outsource would be a good deterrent. The creation of jobs in the middle class would stimulate sustainable economic growth.
There are many ways to generate long term sustainable economic growth using economic policy. I believe we need to cut down on economic spending. According to USA TODAY it is said that government spending totals $649.52 billion this year a 7.2% increase since last year. Most of this money has gone to military fundings. According to an artical in wikipedia the military budget for fiscal year 2009 is requested at $514.4 billion. We coul cut this amount of money to what they really need and use the rest to open new businesses and help out the businesses that need it. Doing this can give people jobs, which is another way to generate long term sustainable economic growth. this could get more consumer spending and generate higher GDP. these are som ways to generate long term sustainable economic growth using economic policy.
Obama has only came out with few programs to stimulate economic growth but none have been fully successful for long term (ex: cash for clunker, stimulate package, etc). As for now, I personally believe there isn’t anything that can stimulate long term sustainable economic growth. The chart estimates that in June 2010 the employment rate is going to drop down to 9.8%. Employment rate continues to drop, so GDP is not going to increase due to the unemployment rate. Obama excepted to raise the taxes for rich people thinking it will not effect middle or lower class Americans. But in fact it effect us strongly, because many of us lost their jobs. By losing their jobs people can’t spend enough so GDP can go up. Few ideas the government can think of for the future is fixing social security, imposing better health care, lowering taxes, and re-hiring employees. By imposing those ideas economic growth can go up rapidly and unemployment rates can go down.
I believe in order to create a long term period of economic growth we need to start by creating jobs for Americans who have suffered by losing their job during this economic crisis. As it is true that the GDP does have disadvantages, the unemployment rate also has advantages and disadvantages. According to the New York Times, the unemployment rate “is simply no longer the best barometer of the country’s economic health.” According to Recovery.gov, Part of the “American Recovery and Reinvestment Act of 2009″ was created in order to preserve jobs and the higher number of employed Americas generates spending resulting in a stimulation of the economy. Aside from the extreme conservative critism of the the Reinvestment Act, if the act works well Americans will see a long term GDP increase proving effective.
Week of September 28, 2009. Long Term Sustainable Economic Growth. Is it possible in the US? Can you think of ways to generate long term sustainable economic growth using economic policy?
I think that a long term economic growth is possible in the US. having said this, one must realize that almost anything is possible; it might just take more time than we want or anticipate. One possible way to generate a sustainable economic growth is to re prioritize government spending and reposition it in programs that will increase the populations spending. this would mean some of the current programs would have to be terminated (programs such as welfare and others that are not cost efficient), but would be replaced with programs that would boost the economy (e.g. programs similar to Cash for Clunkers or energy efficient appliances). something has to change in this area, according to John McCain, “National unemployment is almost 10 percent, the public debt is close to $2 trillion and the deficit is projected to hit $1.6 trillion this year and we go on spending.” in order to create a solid economy, the government must stop spending money on needless programs and reinvest the money elsewhere.
I think it is possible to generate long term economic growth in the US and I think the best way would be to create more job opportunities. The economy will slowly but surely grow if there was a steady employment because it will allow us to increase our spending. Now people instead of putting their money back into the economy by buying whatever products they are just paying off their bills. If there were more job opportunities people would be able to go and put money back into the economy and the economy would slowly recover. Increased employment would eventually result in long term growth of the economy in the US.
I believe there are ways to have a long term sustainable economic growth in the USA. Since most human people in the country gain money working, having reliable jobs, and an increase in hiring would be a start. For that to happen, we not only need the big, important companies, but mostly the small, entrepreneurial market to grow. According to the SBA Office Of Advocacy, small businesses create more than half of the nonfarm private GDP. Small business have generated 64 percent of net new jobs over the past 15 years. It also represents 99.7 % of all employer firms. There form I would say entreperneurship would be one of the ways to having a long term sustainable economic growth in the USA.
hmm what is the best way to find long term sustainable growth in the United States? I think an alternative is distribution of wealth. The problem today is that the people who failed to pay mortgages on bank owned housing are claiming default yet again. There are still no jobs and yet these people who lost the homes are either working way below expected income revenue or just not working at all. So now the homes are being foreclosed again and everywhere is just a mess. A distribution of wealth would be a way to help individuals and steer away from an event of inflation when at this time just to pay *small* bills like a cell phone is a struggle. We can decrease on innovation for awhile and put more focus on trying to hold the economy up from the ground.
I believe there are ways to have a long term sustainable economic growth in the USA. Since most human people in the country gain money working, having reliable jobs, and an increase in hiring would be a start. For that to happen, we not only need the big, important companies, but mostly the small, entrepreneurial market to grow. According to the SBA Office Of Advocacy (sba.gov/advo/stats/sbfaq.pdf), small businesses create more than half of the nonfarm private GDP. Small business have generated 64 percent of net new jobs over the past 15 years. It also represents 99.7 % of all employer firms. There form I would say entreperneurship would be one of the ways to having a long term sustainable economic growth in the USA.
There are plenty of ways to raise long term GDP growth in the US. By creating plans aimed at the middle class, it aims at the majority of citizens in the US. Since the majority is being affected, there are more people to invest in the economy through investments or by an increase in product consumption. An increase in the amount of jobs available would help stimulate GDP growth by greater employment rate, which would also create more revenue for the employees to invest or spend. These are just some ways to increase long term GDP growth
I believe that long term GDP is only going to be accomplished by an increase in available jobs for the unemployed. Recently the hyatt hotels have fired their workers and replaced them with temps. This caused a large protest to erupt on the streets. The people are speaking out and it is up to the people to really push the larger corporations in the right direction. Many people are saving much of what they earn and spending far less than they used to. Once the middle class feels secure in this economy they will start to spend more and the system will regain its normal cycle. I’m hoping that this christmas season may help the economy rebound due to the increase of jobs for the busy season as well as the large amount of spending that will take place.
To achive long term economic growth we need to very carefully invest in the proper buisness’s, to create a steady flow of job oppertunities as well
as give the U.S an edge on foreign markets. We can not create jobs that will provide no advantages for America just to put people to work. We need
intelligent idea’s to bring new markets to aid in the rise of the U.S. Then we
will be able to bring jobs back to citizens. Consumer spending is a large
measure of this countries finiancial health. If people are loseing jobs, people arent spending as much money, in turn more buisness’s will close
resulting in more unemployed. We need to carfully invest in the right places to get America back on track, invest in buisness’s that will be in high demand from consumers. It is the American people who will be the ones responsible for getting America back on track
In order to achieve long term economic growth in America, The United States must increase their efforts to create jobs within our boarders. In order to do this I strongly believe that there needs to be a Major increase in Small Business Startups. Lets face it, the big corporations failed, they got greedy, they outsourced way too much work and were putting Small Businesses that could not compete out of business. Small Businesses are essential to the survival of the US economy, they create way more jobs than the big corporations do too!
I believe, our government also has to take a look at movement of investment capital, building and plant equipment, in the short-run, by making tax abatement incentives available to businesses that relocate within the borders of the United States. For too long we’ve been rewarding relocation overseas without looking at our own enlightened interests. Manufacturing industries have been transplanting their operations overseas for more than forty years, which is an ominous development that prompted some among us in the 1990’s to declare that our economy had become, a “service economy.”
Economic policy refers to the actions that governments take in the economic field. It covers the systems for setting interest rates and government budget as well as the labor market, national ownership, and many other areas of government interventions into the economy. There are many ways to generate long term sustainable economic growth, but in order to do so we have to spend, as we all know consumer spending makes up 2/3 of our economy, unfortunately a recent survey by AlixPartners of 5,000 Americans across all key demographics suggests that spending will return only to 86 percent of prerecession levels. “Americans plan to save an unprecedented 14 percent of their total earnings (the average savings was only 1.4 percent for the prior decade).” So we can generate long term sustainable economic growth using economic policy, but we may never enjoy again the economic growth that improved the lives of so many families.
I believe that one way to generate long term sustainable economic growth in the U.S. is by starting more small businesses. Since most of us don’t have the funds to start our own business and borrowing money from the bank could result in bankruptcy because of a poor bossiness plan, not too many of us are willing to take that chance. But if the government issued grants to people with great business plans, then that would create a whole different story. If people had a chance to get a grant towards their business that they never have to pay it back, I believe that a lot more people would jump at that opportunity. I believe people would do everything they can to qualify for that grant, since they have nothing to lose, and everything to gain. I think that there needs to be one condition for people to qualify for these grants. They need to invest as much as the government is giving them. This will create a perfect balance. It will provide a helping hand for the new businesses, but it will also make sure that their investment is at stake too. That will make them strive to succeed.
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?
It’s no question that this economy is down and we need to figure out a secure plan to improve it. To further benefit US taxpayers we need to stop raising the taxes and start supplying more jobs. The more jobs we offer the better the economy will get. People in this economy aren’t buying alot anymore because of the job cut backs and the forclosures. With more jobs, means more money, which in turn means more spending, which means bigger numbers for out economy.
I believe that in order to achieve long term economic growth in America the United States needs to create more jobs for everyone. By creating more jobs we are providing Americans with an income to purchase goods and generate a cash flow. According to Martin P Wilson author of Strategy for Sustainability – Long Term Success on Suite101.com states “Cash flow is more important than short term profits.” By generating cash flow millions of Americans would be able to purchase items like electronics and keep cash circulating. Consumer spending is a very important and in order to make purchases we need jobs to allow us to spend money.
I believe before we can have consistant long term economic growth America needs to secure jobs for its people. Keeping production of items and services in the country will provides jobs for American that is needed in order to be able to have consumer spending increased. With the goverment starting to also provide programs for consumers by funding different programs that generate jobs it is a start and heading in the right direction. As American begin to recover spending will begin again, jobs will be more secure and the country may begin to pull out of the recession.
The economic policy in the US is flawed and will take money away from middle americans where the cost of living is higher. To obtain long-term sustainability the government must invest in inovations; inovation will create jobs. Another possiblity would be to remove tariffs on inported and exported goods. This would drastically lowers prices world-wide creating markets for new-comers and create opportunity for middle-class americans to buy. This would create higher GDP in the US. In doing so we could achieve long term economic growth that would satisfy the world.
The economy is honestly unpredicable. It is full of variations. Someone could invent something today and creat a billion dollar company, that can generate long term sustainable economic growth and then tomorrow a company can go out of business maing it harder for the economy to be equal. Also, maybe some companies can stop outsourcing to other countries to keep the jobs closer to home. Maybe turning into the green movement can help long-term economic growth becuase the environment will always be there, hopefully.
The ways to generate long term sustainable economic growth using economic policy is to create new jobs and make colleges and universities affordable to minorities and international students. If college is more affordable, families from different categories (poor income, middle income, and high income) will be able to help students pay college tuition and other expenses.
How can we achieve sustainable economic grow. Very Simple, spending less, and producing more. We need to stop spending so much of our tax payers money in the so call war for freedom although it is important to keep our nation safe it is also important to keep our country productive.
We need to generate jobs, we need to make education more affordable so that less fortunate, and underpriviledge kids can earn degrees and contribute to the economy. We can not move the economy if we don’t have jobs, and we can not have productive jobs if we don’t have an usefull education to compete.
To create a more long term and sustainable economic grow America must go back to creating something constant and steady. It really does not matter what it is as long as it impacts the GDP in a positive way. Even the slightest increase in GDP over long periods of time can raise it drastically due to exponential growth. Some Asian countries showed growth rate of 8% per annum which causes GDP to double in under 10 years! The US should start to look at what these countries and other countries with positive GDP and doing across the world and think of similar ways to create long term growth.
I believe that there are two ways to generate economic growth. One way is to use the tax dollars towards improving certain facilities such as schools, and businesses that way more jobs could be produced, as well as using less of those tax dollars on the nations army. The less money used on the national defense the more money there would be to spend on education such as day cares, public schools, and community colleges. This would be a start to produce more revenue for the country.
There are many ways in the US to have long term Sustainable Growth but there has to be a balance that we DO NOT have as of right now in this country and that is a balance between work and home. I think Employers have to give workers more time to spend with the family making them a little happier and giving the extra push to be better at work!