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Gm 545 Case Study 1

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Mr. President, I would like to start off by thanking you for allowing me to have a voice on how the nation’s economy is controlled. I have three suggestions that I have concurred from my research. As President I think you should cut taxes, initiate a stimulus, and increase the Federal Reserve action. I say cut taxes because it’s a sure way to put more money in the hands of consumers and companies. Tax cuts, when used properly, have stimulated the economy. Former President George W. Bush got a lot of credit for moving the economy out of a recession with his tax cuts. The biggest problem that arises from this is that it reduces government revenues, which creates a budget deficit. All we have to do to counter this deficit is to cut government spending. When spending by consumers and companies shrinks, the economy contracts, but the government can fill the gap with a stimulus. The extra spending that we anticipate is meant to stimulate the spending of households and firms until the economy is expanding without need for outside help. We would have to address the problem that the stimulus adds to debt and many not fix the worst of the leftover finance problems. Last but certainly not least the increase of the Federal Reserve action can keep short-term rates low and push down the value of the U. S. dollar. Experts say a weaker dollar has been good for American exports and job growth. Our biggest point of worry here is that when and or if the economy rebounds then the Fed may have just set the stage for a runaway inflation. I feel that these suggestions are in the best interest of our country.

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