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Credit Card Interest Rates Lower: A Savings Deficit
The slight decline over the years of credit card interest rates are actually detrimental to our economy. As the rates keep falling, people think it’s ok to rack up charges on their credit card because this year’s rates are half a percentage lower than last’s. Then, when the bill comes, the money that they would be putting away into savings are going to credit card companies so they don’t fall into crippling credit card debt. This is a result of both fiscal and monetary policy. -
Lehman Brothers Bankruptcy: Leadership Deficit due to Fiscal Policy
Source: Initiation of a large bankruptcy proceeding in 2008 helped lead to the recession of 2008, because Secretary of Treasury Henry Paulson and Timothy Geithner made a “solution” that would protect the federal government from looking bad by refusing to involve any central bank funding. Because the federal government was so concerned with protecting their image and refused to truly protect the billions of dollars from the company, so it couldn't finance itself and lost everything. -
Trade Deficits in 2008: Monetary Policy
The deficit on the trade balance jumped from 43.1% to $51.4 billion dollars, the largest jump since 1996. Since then, it has continued to rise, from $35.9 billion in Freburary 2008 to $67.2 billion in March (and the government assumed this would be only $45.2 billion before). This caused GDP growth to lower at a .2% annual rate, thus causing national growth to faulter and threaten a recession. Imports even continue to rise, thus raising debt even more. -
Affordable Care Act: A Budget Deficit
The Affordable Care Act made it possible for people with less money, previously uninsured Americans, seniors, and taxpayers all over America to acquire health insurance through the federal government. The new overhead costs about 273.6 billion dollars from 2012 to 2022, and will become 22.5% of the $2.76 trillion in government spending. This is a part of monetary policy. -
Extension of Jobless Benefits: Budget Deficit and Fiscal Policy
President Obama signed a bill stating that people can maintain benefits if they have been out of work for six months or more, giving about 2.5 million people $300 dollars a week to get them back on their feet. This greatly increased the government's debt and has forced them to scramble to find money to cover for their increased spending. -
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China's economy is unstable: Trade Deficit from Fiscal Policy
As of right now, we owe China roughly $1.2 trillion. China is looking to turn their economy to more consumer driven levels. China’s GDP went down 6% over the year of 2015. This is due to rise in labor costs and high leverage in the global economy. This decay of China’s GDP can have very harmful effects on our own economy and the value of our dollar. -
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China's Economic Shift: A Trade Deficit
SourceSource: As of right now, we owe China roughly $1.2 trillion. The current state of China’s economy, as they look to turn their economy into a more consumer-driven economy, isn’t looking too good for the United States. China’s GDP went down 6% over the year of 2015. This is due to rise in labor costs and high leverage in the global economy. This decay of China’s GDP can have very harmful effects on our own economy and the value of our dollar, thus shifting how we must handle our rising debt.
