The economic problems that are plaguing the United States economy at the present are numerous to say the least. Since the collapse of the Housing market, the United States has experienced what some have come to call an economic recession. While it remains to be seen if the United States economy is really undergoing a recession at this point in time, this situation can be used as a great opportunity to point out the current struggles of the American economy.
The much touted and highly publicized US $700 billion bailout plan is argued to be good for the economy as a “quick fix” to the problem yet there are a number of economists who feel that the real solution to the problem lies in establishing more solid fiscal policies as opposed to monetary policies. As several economists have pointed out, the monetary solution of providing an economic stimulus package without addressing the fundamental problems is only a “quick fix.
” The world is beginning to realize that all of the credit and financial problems that the world is facing right now cannot be solved by throwing money at it. The problem, as pointed out, is not simply that the world is experiencing a slow down but that there are fundamental flaws with several of the world’s largest economies and as such these problems have to be addressed. Any monetary policy will simply result in concealing the glaring holes in the economic systems and will not provide the needed answers to the problem.
There seems to be no end in sight for this economic problem as governments all over the world announce new economic stimulus packages. There also seems to be a dearth in fiscal policies that are designed to solve this problem. In order to arrive at a more effective solution to the problem, it is important to accompany these monetary policies with sound fiscal policies in order to create solid economic fundamentals that may prevent the occurrence of financial crises such as these in the future.
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