Comsumption
The current state of the economy in the United States is a feeble one, unable to consistently keep its head above water. While the economy is not currently in a recession, we may eventually fall victim to the first recession we’ve had in nearly ten years. Making a prediction on what exactly will happen to the US economy in the future will be extremely difficult. While there is much debate, many economists do not agree on what will become of the economy. Some feel that we will begin a recession over the next year, while others feel that there is significant policy implementation that will allow us to dodge a recession and regain our economic strength. The means in which I will discuss the overall growth and current status of the economy is by analyzing the Gross Domestic Product (GDP), and discuss the factors that cause it to rise and fall. The GDP is the total unadjusted, aggregate income of the United States produced in one year. It is comprised of consumption (C), investment (I), government spending (G), and net exports (x-m), arranged in the following equation: GDP = C + I + G + (x-m). Consumption in the United States has been less than expected mainly due to low consumer confidence. Consumer confidence has hit a 10 year l
Government spending is also a very important part of the GDP. Government spending makes up about 16 percent of the economy’s aggregate expenditures. The government purchases many things with the taxes it generates. Some such things that the government spends their money on are defense, education, Medicare, and other government programs. Currently, and in recent years the government has been spending less than they could have. With the tax money generated, the government has actually been running surpluses. This means that the tax dollars generated by the taxpayers have been stockpiled and have not gone to purchase goods and services. This is good because for the first time in many years we have not been running a deficit. It is also bad because the government could be spending more and it would increase the real GDP. In the future President Bush plans to increase government spending as well as cut taxes. ow with an index of 106.8 as reported by Alan Greenspan. In the past 2 months the index number has plummeted nearly 22 points, the biggest decrease since the 1990 -1991 recession. The reason for this recent drop in consumer confidence is due to several key factors. One factor is the poor performance of the stock market. The Dow Jones is down from its peak that was hit last year, but has now rebounded slightly. The NASDAQ took a dive with the decrease in the prices of tech stocks. The NASDAQ has fallen nearly 56% from its peak in March of 2000. The Wilshire 5000,
Some topics in this essay:
Dow Jones,
President Bush,
,
GDP Government,
Louis Dallas,
Product GDP,
Alan Greenspan,
GDP Categories,
Consumption United,
consumer confidence,
government spending,
net exports,
net wealth,
trade deficit,
inflation rate,
rate unemployment,
recession feel,
stock market,
reason increase,
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Approximate Word count = 995
Approximate Pages = 4 (250 words per page double spaced)
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