Economy Situation In The USA Essay Example | Topics and Well Written Essays - 1250 words - 1

Economy Situation In The USA - Essay Example The main problem looming around the economy of USA is that of a deteriorated trend in the economic growth rate. Noted economist Ragu Rajan revealed that it will be wiser for the national authorities to focus more upon long-term structural issues such as unemployment and income inequality. In addition, it will also be wise for the national administration to arrange for some vocational training for the national youth as well. In fact, it could easily be realized that unemployment is the reason behind a rising rate of income inequality in the nation. Observers researching this aspect have figured out certain areas which need to be emphasized upon by the national authorities while framing their respective fiscal policies.These measures have been described as follows. Firstly, it has been realized that the national population or rather the labor force is suffering from a lack of productivity which the reason why the creation of economic value in the nation has been poor. This is the reaso n why it has been stressed that the finance committee must lay some emphasis upon investing more and more funds for industrial innovation. The higher the incorporation of technology into the production process, lower will be the efforts that a labor needs to put for the production of a single unit; hence he will be left with more energy to produce excess units within the same time period. In fact, this is the method being followed up in Europe that concentrates upon a stable innovation path so as to stick to a stable economic growth.

The European Sovereign Debt Crisis Research Paper - 1

The European Sovereign Debt Crisis - Research Paper Example After a while, the deficit rate became enormous, thus leading to the rise of the sovereign debt crisis in the year 2009. Therefore, it is arguable to state that is the starting point of the European debt crisis. This paper will attempt to look at the causes and effects of the European debt crisis. How Greece became the origin and what other countries were affected by the situation. Finally, the current state of Europe after the debt crisis shall be analyzed. Greece had one of the fast growing economies and as a result had a massive deficit. As the global financial crisis came to pass, Greece was greatly affected. This was evident especially on the country’s largest industries (tourism and shipping industry). This led to lump sum spending to keep the economy going, but instead the sovereign debt increased with each passing day. With increased borrowing from the International Monetary Fund and the European Union, the Greek government was problem bound. Greece registered a debt of five hundred and forty billion dollars (Stein, 1). This is one hundred and twenty five percent of its Gross Domestic Product. Despite Greece making one or two mistakes, there were other factors that led to the crisis in Greece. External debts of Europeans states are at the center of the recent crises. In general, the debt crisis is associated with the budget deficits being in excess of the values provided by the Maastricht Treaty, and the Stability and Gro wth Pact (Ludwig Von Mises Institute, 1). These groups only focused on debt and deficit ratio ignoring external debts. Consequently, the laws governing the European Central Bank do not allow single investors and creditors to borrow government bonds in case of a crisis. Eventually, the debt crisis became alarming as the country decreased public benefits (Greece froze civil service salaries and in turn raised taxes and retirement