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Another fiscal policy that could be implemented is for the government to spend more, thereby increasing aggregate demand. This may have an impact on consumer confidence about the long-run state of the economy, but those long-run concerns are not driving consumer spending today. At this time, the spending policy is something that government can pursue. If poorly targeted, however, its impacts will be temporary. Indeed, if everybody knows that the measure is temporary, this will not affect consumer confidence or business investment in the long run. However, if the policy appears permanent, then the responses could be more permanent in nature as well.
Lowering taxes on that bottom 80% will increase consumer spending, but again might not improve consumer confidence because it only makes the long-run deficit problem worse. Only spending on job creation, therefore, is recommended because it serves to a) address...
Fiscal policy should also address the long-term confidence issue in a meaningful way, by reigning in health care spending and entitlements. Current proposals on the latter, which include grandfather clauses for baby boomers (the wealthiest generation ever so the least likely to actually need such entitlements) do nothing to address the problem, because such policies only push the spending cuts further down the road, at which time the next generation will be in power and probably choose to push those cuts further down the road. Meaningful action today on entitlements and health care spending, combined with job creation programs, will improve consumer confidence in the short run and long run, allowing aggregate demand to move to a permanently higher level.
Economic Trends In terms of output and growth, Canada's real GDP was 2.96% higher than it was a year ago, but the growth trend is slowing down from a growth rate high of 3.81% in Q3 2010. Japan's economy has contracted in Q2 2011 by 0.76%. It's rate has been volatile, growing rapidly over the past year only to contract again. The UK's growth rate is 1.63%, and that country has
Economic Indicators The change in the United States Real Gross Domestic Product (GDP) ratings has shown both ups and downs in the U.S. economy over the last two years. In the most recent quarter, the first quarter of 2011, the U.S. GDP increased over 2%. While the GDP has increased every quarter since mid-2009, the quarterly increase in each of the last four reported periods was weaker than the quarterly increase
Economic Challenges Canada Faces In recent years, the challenging economic condition in Canada has emerged as a concern for citizens, policy makers and the government alike. Canada faces challenges in terms of creating a more innovative society, as the country continues to experience a significant productivity gap compared to other advanced industrial economies. The Canadian industry appears to be slower in successfully developing, applying and marketing innovative products, processes and services
Economic indicators are used to measure the financial health of the economy. There are many methods and tools for measuring the economy and every economist has his favorite method. The health of the economy is measured by tracking certain indicators. Different economists use these indicators in various combinations. Some economists place more or less weight on different ones in making their predictions about which direction the economy will go. It
Economics US Economy 2009 economy had had to adapt and change over the years. The country has moved from a nation where there were significant differences between the economic conditions as well as different policies which impact on the economic conditions of the states. A general trend over the last 200 years has been a movement away from manufacturing and towards white collar jobs, including high tech industries and the knowledge industries
Mexico Economic and Political Situation in Mexico In recent years, the economic and political situation in Mexico has fallen under international scrutiny, and as a result, critics have analyzed the country's policies toward exchange rates, foreign trade, domestic monetary systems and foreign policy. Mexico currently operates under a free market economy that contains a mixture of modern and outmoded industry and agriculture, increasingly dominated by the private sector. Recent administrations have expanded