and one that some economic analysts say may persist for at least another year. The unemployment rate has risen to levels not seen in over 20 years. The current unemployment rate is at 8% and is expected to rise further. The inflation rate is -2. 4 percent, meaning that overall, prices are falling. Recommendation Currently our economy is in deep recession and one of the challenges we have is the unemployment rate, which has risen to levels not seen in over 20 years.
The current unemployment rate is at 8% and is expected to rise further. Also we have one more challenge of inflation of -2. 4 percent – it means that our economy is in deflation as overall prices are reducing. After having a detail discussion with my colleagues, economic consultants and economic advisors I have following recommendation for President of the United States to bring the economy back on track:-
I believe and agree with my colleagues “Raymond Burke” and “Allison Tanney” advice that Government/Congress should use Expansionary fiscal policy along with Expansionary monetary policy. This will be accomplished by increasing aggregate expenditures and aggregate demand through an increase in government spending (both government purchases and transfer payments) or a decrease in taxes. I also agree with by colleague “Patricia Lopez” that Fed should leave interest rates alone, but strongly sell bonds and raise the bank reserve requirement.
This will increase the money supply and decrease interest rates. This is accomplished by buying U. S. Treasury securities in the open market, lowering the discount rate, and reducing reserve requirements. In these difficult economic times, I would recommend that the President should increase in government purchases, a decrease in taxes, and/or an increase in transfer payments to close a recessionary gap, stimulate the economy, and decrease the unemployment rate.
I disagree with the colleague “Kathy Lee” that the President should consider to raise taxes and reducing government spending, since this will have negative impact on our current economy as this will not help us to control unemployment. Finally, I recommend the President to use Expansionary fiscal policy along expansionary monetary policy to help our economy to recovery current deep recession.