U.S. economy – Has it become a permanent debt machine?_Featured_, Economy Monday, February 27th, 2012
Economists are scared about the nation’s present economy. The rise in both national and public debt can push the country towards a financial catastrophe that would be very difficult to recover. If Washington can not rein it in by means of debt relief or other alternative methods of crisis management, it could be a disaster for the whole nation. Moreover, the poor health of American economy can have a very serious impact on the global economy, in coming days.
Causes of the U.S. economic crisis
The budget deficit of almost 1 trillion USD clearly indicates that the nation is going to face a severe financial accident. It’s a serious threat to the country as well as the entire world. Debt relief is one of the most effective ways of getting rid of this federal crisis. There are many causes of this miserable condition of U.S. economy. Some of them are as followed:
Consequences of war – The country has gone through many wars. From World War II to Iraq war and everything between – the country has spent millions of dollars on wars and army. It has paid for the wars either through debts or through taxes, and that has badly affected the U.S. economy. High federal spending on wars has impeded the economy slowly. If the government can’t find any good and effective way of debt relief, then Americans should start preparing for even a worse economic situation.
Failure of Federal Reserve – You may hear people criticizing about the political parties and political leaders. However, you will hardly find someone talking about failing Federal Reserve System. The Federal Reserve, also called as Fed, was created nearly 100 years ago. Now it’s time to evaluate whether this century-old financial system has worked well or not. Fed has failed to fulfill its responsibilities. The main motive of this system was to keep unemployment low, and the system has given disappointing performance with regards to this. It is also unsuccessful in keeping the inflation controlled. Since the inception of Federal Reserve, the country has experienced many recessions. The country is knee-deep in debt, actually.
Now the question is, should the country go like this for longer and wait to see a serious economic disaster? Of course not; White House should sincerely look for some effective ways of debt relief to save the country from being a debt machine.