1.Explain the cause of our current recession in your own words. 2- out of what y
ID: 1187966 • Letter: 1
Question
1.Explain the cause of our current recession in your own
words.
2- out of what you've learned in EC101 what do you think the
best solution for this reccesion? Explain
3- Do you feel we are in a recession. Support your answer
with
numbers and facts
4- how can we solve the trade deflict problem (Think about
the
competition and dollar value)
5- Should we worry about the trade deflict and why?
ANSWER THOSE QUESTIONS IN YOUR OWN WORDS, PLEGRISE WILL
RESULT
A
GRADE OF ZERO.
IF YOU USED ONLINE SOURCES PLEASE PROVIDE THE
URL.
ANSWER ALL QUESTIONS AND PROVIDE EXAMPLES.
Explanation / Answer
1,The economy was already on the brink of recession before the current housing/mortgage based events accelerated the process. Both theiraq war and the high price of oil have been major culprits, but the growth of debt has also been a powerful factor as well.
If you read newspapers or the Internet news, the word "socialism" is sometimes used, usually in a negative way in the US. It refers to the transfer of wealth from one group to another. But the transfer of wealth from one group to another also happens in capitalism, and lately, it has been happening a lot! The Iraq war has transferred wealth from the public to the military companies. The Iraq war, in turn, has led to higher oil prices And higher oil prices have transferred wealth from the public to the big oil companies. That is why Exxon-Mobil has acheived record profits, while the rest of the economy has suffered. Today, the US is experiencing corporate socialism on a scale never before imagined.
Then, to put the economy into a total tailspin, the housing and mortgage crisis has done the rest. Thanks to deregulation and lack of oversight, the major financial institutions have been permitted to make massive, highly leveraged bets, without having the capital to back up their transactions if the bets go against them. The bets did and now you have the mess you see today.
2.The best solution would be to cut everybody's income taxes so that more money is placed into people's pockets on a continuous basis. That extra money would then be spent by people in the economy, thus boosting it out of a recession. For instance if you got an extra $100/paycheck because Uncle Sam took less money out, you'd most likely spend that money on something. That extra $1,200/yr times the millions of workers across the nation would equal BILLIONS in yearly stimulus into the economy. Thus making a tax cut a better economic stimulus than a one time check funded by debt.
3
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