Written by: Trevor Greene
The United States encountered a very crucial and bad time in their economy. In 2008 the US went into a recession. Prices rose and people stopped spending money as willingly. This took a toll on everyone. Jobs were lost and many people were left clueless of what to do. There was no exact reason to why this happened, but there were a few that were easily identified when coming to a conclusion. One of them was that there was an overhang of private sector debt that was hard to pay off. Others say that the government just talks about it and has taken no action to fix it. These are just a few problems with the American economy.
Many government officials and economists say that the easy fix to this problem would be to raise taxes, but that would not be a smart idea, especially during a time like this. This would just put the people of America into more and more debt. This is a time that encourages very, very much government spending. With government spending, the government could produce more and more jobs. Also not only producing jobs, the government could help people out of debt, by providing different government plans and different government aids; like social security.
Not only does the government have to worry about the national debt, but they also have to worry about the unemployment rate. A solution According to Paul Krugman of the New York Times is “So what could we do to reduce unemployment? The answer is, this is a time for above-normal government spending.” This just shows that government spending is necessary to help America out of the Recession. With the more amounts of government spending comes more time to stall Intel the private sector is ready to spend money again.
With all of this being said, this does not mean that the government is in competition with the private sector. It just puts unemployed resources to work. When people are in tough times, they tend to save their money, obviously. The economy is the money flow throughout the United States and is good when there is lots of money be spent consistently. When this process slows down this is when our economy is troubled. The problem is, is how is the government suppose to get the people to spend more money if they are trying to save it, because of job loss. This is a very tough situation for the United States of America and is not quick to resolve.
As the United States has been in a economic crisis since 2008, the money flow has been slow, but as time goes on it will be back up. With government aide to encourage spending the United States will be back on its feet in no time. This is why it would be a very bad time to cut taxes in America today.
Paul Krugman. “The Story of Our Time” New York Times. April 28, 2013. Web. April 29, 2013