So this article begins by stating that the United States economy was growing at a much slower rate than usual and is forecasted to continue on this downward sloping trend. since the interest rates are so low and the inflation is also low the fed is very limited in the fiscal policy options that they could undergo. people are forecasting the United States to become a naturally slow growing economy in the near future. They have offered four different ways that they can fix the economy which are as follows, Tax structure, Tax base, Agricultural subsidiaries, and infrastructure. do you think that it is fair for this to be assumed? I think that it is way easier said than done, if it was easy to be done, I think that every economy would be perfectly ran if it was really easy to propose these fiscal policies.
https://www.foxbusiness.com/money/governments-increase-global-growth
With the economy growing at such a high rate right now, it does make sense that it will eventually slow down. As far as these fiscal policies go, I do believe some could help offset a slow moving economy, but getting the funding via taxes of the common worker can make for a tough challenge.
ReplyDeleteI agree that it is easier said than done. In class we talked about changes in tax structure in order to fix many different issues within the economy. Especially with the trade war with China occurring, it is difficult to know what to do. If the government were to raise taxes, then consumers will not spend as much money on goods which is what we need since income= spending= investment. The US needs investment right now because we rely so heavily on Chinese products. Reducing the interest rates would encourage borrowing and investing, but the interest rate is already low.
ReplyDeleteI believe that perception plays a large role in how we determine how the economy is doing. If the government is juicing performance indicators and shaping them however they want then it could lead us to perceive that the economy is doing better than it truly is.
ReplyDeleteI agree that it is definitely easier said than done but I feel like sooner than later they'll be force to take some action if the economy continues to grow at a slower rate.
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