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Impact of economic activities
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The American Recovery and Reinvestment Act of 2009 was a stimulus package that was designed to get the economic and employment rate to increase to stop a recession in the United States. The bill was approved in February 2009 by President Barack Obama to add 789 billion dollars to stabilize the US economy. “This Act was originally called by its supporters the bill that was the only bill to save the nation from economic ruin” (Graham, 2009). Was this bill the bill to save the nation or was it a big waste? Did this act help the economy and did it really give the economy the boost that was expected with the changes in what it aimed to fix which included household consumption, firms, government spending, and net exports? Since unemployment was …show more content…
Public investment in the US in 2009 was less than 3 percent of the GDP and would have to be 6 percent to restore the market in 2009 but the increase that public investing increased was less than 1 percent a year (Giavazzi, 2009). For the public GDP in 2014 it increased by less than 1 percent and was a minor change from 2009 and was in a decline in 2014 (Smith, 2014). For private Investment it is a much larger portion of the GDP and accounts for 20 percent of the GDP (Giavazzi, 2009). The private investment GDP didn’t change too much it dipped a little in 2009 and returned to 20 percent of GDP in 2014 (Economywatch, 2016).
The exports in 2009 were negative 9.6 percent GDP and increased quickly in 2010 to 7.2 percent GDP. The imports in 2009 were also negative and higher than the exports with 13.9 percent and increased to 10.4 percent GDP (Briales, 2010). This shows that the imports and exports of the economy increased quickly and kept the consumption of the people up as they still wanted items sent from other places and their items were wanted in other countries
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My reasons for this opinion are that they did not do what they planned to do with the money. In 2009, they planned for most of the money to be spent in the fall but the Federal Transit Authority found that less than 6 percent of the $8.4 billion it received in stimulus funding was spent by the fall (Graham, 2009). Fiscal policy timing is everything and getting the act out and only using 6 percent in the fall when they were expected to spend most of the money earlier than that could have negativity impacted the effects of the American Recovery and Reinvestment Act of 2009. When they had spent the money for the act it did not have the affect everyone desired and only gave a minimal increase to the economy. If the act was put into action sooner then the effect of the stimulus package would have been much greater and would have improved the economy sooner than what it did. The act did keep consumption up because the imports and export GDP’s were negatives for a year and then the data showed that it had changed back to positive GDP for imports and exports. I feel like this was not the boost that was expected but it did help our economy get out of the recession and has got our economy back into shape. I believe that this bill coupled with a few other actions did get the economy back on track even though it did not meet the expected results in the time
In 1929, the stock market crashed, bringing great ruin to our country. The result, the Great Depression, was a time of hardship for everyone around the world. The economy in the US was lower than ever and people were suffering immensely. During these trying times, two presidents served- Herbert Hoover and Franklin Delano Roosevelt (F.D.R.) Both had different views on how the depression should be handled, with Hoover believing that the people could solve the issue themselves with no government involvement, and with F.D.R. believing that the government should work for their people in such difficult times.
Meade (1988) stated that, because of the exchange rate rapid decline so much since early 1985 in the US and because the monthly trade statistics has been examined so thoroughly for any sign of a turnaround in the nominal trade balance, the J-curve phenomenon has received much attention. The statistics often implies that the negative effect of depreciation is reflected in the J-curve as the continuation of nominal trade deficit. Between early 1985 and 1988, the exchange value of US dollar in terms of currencies of other countries, registered a sizeable depreciation. The deficits recorded in the trade account were mirrored in the current account deficit. Meade depicted the significance of the exchange rate to the trade account as well as current account through the use of the J-curve highlighting that the phenomenon is used as a long-term goal to curb the deficits, however in the short-run, depreciation will increase the nominal deficits accumulated by a country.
In his book, A New Deal for the American People, Roger Biles analyzes the programs of the New Deal in regards to their impact on the American society as a whole. He discusses the successes and failures of the New Deal policy, and highlights the role it played in the forming of American history. He claims that the New Deal reform preserved the foundation of American federalism and represented the second American Revolution. Biles argues that despite its little reforms and un-revolutionary programs, the New Deal formed a very limited system with the creation of four stabilizers that helped to prevent another depression and balance the economy.
The relief side of the New Deal was the assist in the removal of poverty, provide food for the starving, and intervene to prevent people from losing home/farms. The recovery side was
Assessment of the Success of the New Deal FDR introduced the New Deal to help the people most affected by the depression of October 1929. The Wall Street Crash of October 24th 1929 in America signalled the start of the depression in which America would fall into serious economic depression. The depression started because some people lost confidence in the fact that their share prices would continue to rise forever, they sold their shares which started a mass panic in which many shares were sold. The rate at which people were selling their shares was so quick that the teleprinters could not keep up, therefore share prices continued to fall making them worthless. Also causing many people to lose their jobs as the owners of factories could not afford to pay the workers wages.
However, it was a success in restoring public confidence and creating new programs that brought relief to millions of Americans. The New Deal provided Americans with the assurance that things were finally changing. People were being employed, acts were passed, discrimination was addressed and women's opportunities were restored.
In the information presented by the Price Water House Coopers (PwC) report, “the $787 billion American Recovery and Reinvestment Act (ARRA) signed by President Obama on February 17 was an attempt to invigorate a faltering economy marked by rising job losses, falling GDP, continuing uncertainty in the capital markets and world economic weakness”. The main objective of the stimulus was the protection of existing and the creation of new job opportunities, while the secondary objectives included investments in infrastructure, education, health, energy and relief programs for the people affect...
...e excessive speculation in the late 1920's kept the stock market artificially high, but inevitably led to the big crash. Overproduction may have seemed like a good idea but in the long really hurt the U.S. as the farm industry fell, workers fired, and purchasing levels across the country were at all time lows. These speculators combined with the overproduction and the maldistribution of wealth, caused the American economy to crash. Today, our government still argues over who should have the nation’s wealth and even if the wealthier should pay higher taxes then the less wealthy. Some could argue that the government should of utilized laissez faire and kept there hands off of the people’s business and let the people work things out on there own. Either way, the country did a very good job of making changes and not letting anything get as worse as it was in the 1920’s.
This component is a good way to cut down on discretionary spending and save the country billions of dollars but it will a lot hurt the economy in a lot of ways. We need to elaborate on the reform, and not completely ignore the reform like Obama has been doing for the last three years.
The key challenge that US policy must address the reduction of greenhouse gases while growing the economy. Recovery Act spending acted as a stimulus package to revive an economy heavily affected by the GFC(Aldy, 2012 p 3). While the recovery funds were aimed at stimulating the economy, President Obama stressed the importance of the development of renewable energies in his first State of the Union address (Roberts, Lassiter, & Nanda, 2010 p 3).
The money supply increased which also lead to an increase in spending. And the effect was that from 2002 spring to 2006 spring, the GDP increased to 26 percent, thus as the GDP...
...avoiding even deeper collapse of the global GDP and of employment. The government also created the Troubled Asset Relief Program (TARP), for the establishment and administration of the treasury fund, in an effort to control the ongoing crisis.
President Franklin D. Roosevelt’s New Deal was a package of economic programs that were made and proposed from 1933 up to 1936. The goals of the package were to give relief to farmers, reform to business and finance, and recovery to the economy during the Great Depression.
The United States faced the worst economic downfall in history during the Great Depression. A domino effect devastated every aspect of the economy, unemployment rate was at an all time high, banks were declaring bankruptcy and the frustration of the general public led to the highest suicide rates America has ever encountered. In the 1930’s Franklin D Roosevelt introduced the New Deal reforms, which aimed to “reconcile democracy, individual liberty and economic planning” (Liberty 863). The New Deal reforms were effective in the short term but faced criticism as it transformed the role of government and shaped the lives of American citizens.
In November of 2004, the United States ran a fifty-four billion dollar trade deficit, translating to over 600 billion for the entire year. This deficit is a result of the disparity between the amount of goods that the US imports and the amount it exports. To equalize this deficit in its current account, the American government sells assets from its capital account, often to foreign investors. This phenomenon is seen as a serious threat to the success and continued growth of the nation’s economy, tied in with popular concerns that the United States is losing its competitive and dominant edge in global economics. The traditional economic theory employed to solve this problem calls for a return to mercantile protectionism, through use of tariffs and subsidies to drive up the price of imports and lower the price of exports. Running contrary to this is a second option: increasing domestic savings and lowering government spending. These theories both aim to decrease American dependence upon foreign imports and investment, and ultimately equalize the enormous trade deficit that currently exists.