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Caitlin Miller Period: 4 1/31/2014 Economic Analysis Essay The United States economy is recovering from a recession right

now, but the economy is slow and has not fully recovered. This is evident because of three commonly used indicators, which are unemployment rate, rate of GDP growth and inflation rate. The current unemployment rate of the United States, or percentage of unemployed workers, is 6.7% (Labor Force Statistics). This is a major improvement from the 2009 high of 10%, however many economists say the goal should be 6.5%, and in this economic climate 6% would probably be considered full employment (Behravesh). The current rate of GDP growth is 3.2% (United States Economy). A good GDP growth rate is 6%, and the big difference between an ideal GDP growth rate and the current GDP growth rate demonstrates how the economy is still slow. The current inflation rate is 1.5% (Current US Inflation). This is a good inflation rate, however as the economy continues to grow it will probably increase unless the government is very careful. In order to help the economy and prevent high inflation rates, the United States federal government should increase federal taxes, increase federal spending, lower interest rates, and slightly decrease the amount of T-Bills being bought. To help moderate the economic growth and pay for government spending, the US government should slighty increase income tax and increase taxes on alcohol, tobacco, gambling and, if legalized, marijuana. These taxes will help with government spending that will provide jobs and increase production. The taxes will also ensure that the economy doesnt grow to rapidly which would cause a surge in inflation (Simpson). Tobacco, alcohol and, if legalized, marijuana would be taxed because they are substances that are scientifically proven to have negative and addictive effects. The tax would be good for everyone because people who have

the addiction need to buy the products until, and if, they quit. While providing revenue, these taxes would also discourage potential users and give current users and extra incentive to quit abusing the substances. Gambling would be taxed because it can also be addicting, and people can win large sums of money. If a small portion of those winnings are taken, it would not have as severe an effect as taken away huge chunks of peoples incomes. Income taxes should be slightly raised, and taxes on alcohol, tobacco, gambling and marijuana (if legalized) should be raised. To continue to help the economy, the US government should increase spending. The two major positive effects this will have is increasing the money supply and creating more jobs (Whitney). Both of these things will help the slow upward spiral towards a healthy economy. However, the economy is already slowly but steadily growing right now, so government spending should only be increased slightly to prevent the economy from growing too rapidly, and to keep the debt under control (Simpson). The US government should slightly increase spending. The US government should also alter some of the fed policies to help bolster the recovery. The Federal Reserve should lower interest rates a little bit. This will help stimulate the economy, increase asset value and overall increase indivualss money supply (Kliesen). However, the Fed should be careful not to lower interest rates too much, because very low interest rates encourage spending opposed to saving, which could be dangerous for consumers in the still fragile recovery (Kliesen). The Fed should also continue to slowly taper it buying of TBills. T-Bills are important for increasing the money supply, which is an important step right now. However, as the economy continues to grow, the government buying T-Bills will be less and less necessary. The US government should decrease interest rates and continue to slowly

decrease the amount of T-Bills it buys. In order to help the economy and prevent high inflation rates, the United States federal government should increase federal taxes, increase federal spending, lower interest rates, and slightly decrease the amount of T-Bills being bought. The government should use fiscal and monetary policy delicately over the next couple of years in order to support a recovery while keeping inflation balanced. The US government wielding available powers delicately is the key to helping minimizing huge booms and busts. Raising taxes, increasing spending, lowering interest rates and slightly decreasing the amount of T-Bills being bought will help support and heal the United States economy.

Works Cited Behravesh, Nariman. What Is a Good Unemployment Number, Really? NPR. National Public Radio, 3 Jan. 2013. Web. 2 Feb. 2014. <http://www.npr.org/2013/01/03/168508910/what-is-a-good-unemployment-numberreally>. Current US Inflation Rates: 2003-2014. US Inflation Calculator. Coin News Media Group, 2013. Web. 2 Feb. 2014. <http://www.usinflationcalculator.com/inflation/currentinflation-rates/>. Kliesen, Kevin L. Low Interest Rates Have Benefits... and Drawbacks. Federal Reserve Bank of St Louis. Federal Reserve Bank of St Louis, Oct. 2010. Web. 2 Feb. 2014. <http://www.stlouisfed.org/publications/re/articles/?id=2022>. Labor Force Statistics from the Current Population Survey. Chart. Bureau of Labor Statistics. United States Department of Labor, 30 Dec. 2013. Web. 2 Feb. 2014. <http://data.bls.gov/timeseries/LNS14000000>. Simpson, Stephen D. Macroeconomics: Government- Expenditures, Taxes and Debt. Investopedia. Investopedia, 2013. Web. 2 Feb. 2014. <http://www.investopedia.com/university/macroeconomics/macroeconomics10.asp>. United States Economy Expands 3.2% in Q4. Trading Economics. Trading Economics, 2013. Web. 2 Feb. 2014. <http://www.tradingeconomics.com>. Whitney, Mike. Want to Fix the Economy? Spend More Money. Counterpunch. Counterpunch, 4 Feb. 2013. Web. 2 Feb. 2014. <http://www.counterpunch.org/2013/02/04/want-to-fix-the-economy-spend-moremoney/>.

Bibliography Behravesh, Nariman. What Is a Good Unemployment Number, Really? NPR. National Public Radio, 3 Jan. 2013. Web. 2 Feb. 2014. <http://www.npr.org/2013/01/03/168508910/what-is-a-good-unemployment-numberreally>. Brennan, Anne. 11 Surprising Things You Have to Pay Taxes on. Business Insider. Business Insider, 10 Apr. 2013. Web. 2 Feb. 2014. <http://www.businessinsider.com/11things-you-have-to-pay-taxes-on-2013-4>. Current US Inflation Rates: 2003-2014. US Inflation Calculator. Coin News Media Group, 2013. Web. 2 Feb. 2014. <http://www.usinflationcalculator.com/inflation/currentinflation-rates/>. Kliesen, Kevin L. Low Interest Rates Have Benefits... and Drawbacks. Federal Reserve Bank of St Louis. Federal Reserve Bank of St Louis, Oct. 2010. Web. 2 Feb. 2014. <http://www.stlouisfed.org/publications/re/articles/?id=2022>. Labor Force Statistics from the Current Population Survey. Chart. Bureau of Labor Statistics. United States Department of Labor, 30 Dec. 2013. Web. 2 Feb. 2014. <http://data.bls.gov/timeseries/LNS14000000>. Schmidt, Michael. A Look at Fiscal and Monetary Policy. Investopedia. Investopedia, 15 Mar. 2012. Web. 2 Feb. 2014. <http://www.investopedia.com/articles/economics/12/fiscal-or-monetary-policy.asp>. Simpson, Stephen D. Macroeconomics: Government- Expenditures, Taxes and Debt. Investopedia. Investopedia, 2013. Web. 2 Feb. 2014. <http://www.investopedia.com/university/macroeconomics/macroeconomics10.asp>.

Thiruvengadam, Meena. The 4 Things You Need to Know about What the Fed Said Today. San Jose Mercury News. San Jose Mercury News, 30 Jan. 2014. Web. 2 Feb. 2014. <http://www.mercurynews.com/business/ci_25020108/4-things-you-need-knowabout-what-fed>. United States Economy Expands 3.2% in Q4. Trading Economics. Trading Economics, 2013. Web. 2 Feb. 2014. <http://www.tradingeconomics.com>. U.S. Department of State. Monetary and Fiscal Policy. Country Studies. Country Studies, n.d. Web. 2 Feb. 2014. <http://countrystudies.us/united-states/economy-7.htm>. Whitney, Mike. Want to Fix the Economy? Spend More Money. Counterpunch. Counterpunch, 4 Feb. 2013. Web. 2 Feb. 2014. <http://www.counterpunch.org/2013/02/04/want-to-fix-the-economy-spend-moremoney/>.

Critical Evaluation of Websites 1. URL of the Website: http://countrystudies.us/united-states/economy-7.htm 2. Website Title: Country Studies 3. What organization and/or individual created this website? Country Studies 4. Can you rely on this information? Yes No Yes, because it was created by an independent organization that simply compiles information from various credible sources like the United States Department of State 6. Is the material: ___Primary/Original _x_Secondary/Derived? 7. When was this page written or last updated? It is unclear, but the information is not time sensitive 8. Rate this web page. use with caution good, basic information excellent for the assignment

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==================================================================== ========== 1. URL of the Website: http://www.investopedia.com/articles/economics/12/fiscal-or-monetarypolicy.asp 2. Website Title: Investopedia 3. What organization and/or individual created this website? Investopedia 4. Can you rely on this information? Yes No Why or why not? The article was written by a website that exists to inform consumers. 6. Is the material: _x_Primary/Original ___Secondary/Derived? 9. When was this page written or last updated? Last year 10. Please rate this web page. use with caution good, basic information excellent for the assignment

==================================================================== ========== ==================================================================== ========== 1. URL of the Website: http://www.mercurynews.com/business/ci_25020108/4-things-youneed-know-about-what-fed 2. Website Title: San Jose Mercury News 3. What organization and/or individual created this website? Mercury News 4. Can you rely on this information? Yes No Why or why not? Yes, because it is an article written by a large news franchise. 6. Is the material: _x_Primary/Original ___Secondary/Derived? 9. When was this page written or last updated? 1/30/2014 10. Please rate this web page. use with caution good, basic information excellent for the assignment 1. URL of the Website: http://www.businessinsider.com/11-things-you-have-to-pay-taxes-on2013-4 2. Website Title: Business Insiders 3. What organization and/or individual created this website? Business Insider 4. Can you rely on this information? Yes No Why or why not? It is just an article that is meant to be interesting and have trivial facts in it. 6. Is the material: ___Primary/Original _x_Secondary/Derived? 7. When was this page written or last updated? April 10, 2013 8. Rate this web page. use with caution good, basic information excellent for the assignment

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========== ==================================================================== ========== 1. URL of the Website: http://www.npr.org/2013/01/03/168508910/what-is-a-goodunemployment-number-really 2. Website Title: NPR 3. What organization and/or individual created this website? National Public Radio 4. Can you rely on this information? Yes No Why or why not? Yes, because NPR is a widely known and trusted organization with credible information 6. Is the material: _x_Primary/Original ___Secondary/Derived? 9. When was this page written or last updated? January 3, 2013 10. Please rate this web page. use with caution good, basic information excellent for the assignment

==================================================================== ========== ==================================================================== ========== 1. URL of the Website: http://www.usinflationcalculator.com/inflation/current-inflation-rates/ 2. Website Title: US Inflation Calculator 3. What organization and/or individual created this website? Coin News Media Group 4. Can you rely on this information? Yes No Why or why not? It is simply numbers and statistics from the past couple years, and the website was created by a large media group. 6. Is the material: ___Primary/Original _x_Secondary/Derived? 9. When was this page written or last updated? 2014 10. Please rate this web page. use with caution good, basic information excellent for the assignment

1. URL of the Website: http://www.stlouisfed.org/publications/re/articles/?id=2022 2. Website Title: Federal Reserve Bank of St Louis 3. What organization and/or individual created this website? Federal Reserve Bank of St Louis 4. Can you rely on this information? Yes No Why or why not? Yes, because it was created by a federal reserve bank, which is a governmental institution. 6. Is the material: _x_Primary/Original ___Secondary/Derived? 7. When was this page written or last updated? October 2010 8. Rate this web page. use with caution good, basic information excellent for the assignment

==================================================================== ========== ==================================================================== ========== 1. URL of the Website: http://data.bls.gov/timeseries/LNS14000000 2. Website Title: Bureau of Labor Statistics 3. What organization and/or individual created this website? United States Department of Labor 4. Can you rely on this information? Yes No Why or why not? Yes, because it was created and provided by a credible government organization. 6. Is the material: _x_Primary/Original ___Secondary/Derived? 9. When was this page written or last updated? 2014 10. Please rate this web page. use with caution good, basic information excellent for the assignment

==================================================================== ========== ==================================================================== ========== 1. URL of the Website: http://www.tradingeconomics.com 2. Website Title: Trading Economics 3. What organization and/or individual created this website? Trading Economics 4. Can you rely on this information? Yes No Why or why not? It was created by an organization that was made to inform consumers. 6. Is the material: _x_Primary/Original ___Secondary/Derived? 9. When was this page written or last updated? 2013 10. Please rate this web page. use with caution good, basic information excellent for the assignment

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