Us Economic Health Case Study

Health has been influenced by many factors such as poor health status, disease risk factors, and limited access to healthcare. All these factors are due to social, economic and environmental disadvantages. According to the World Organization (WHO) (2015), “the social determinants of health are mostly responsible for health inequities, which is the unfair and avoidable differences in health status seen within and between countries”

The health status of the population in the United States is a national priority. The Healthy People 2020 outlines priorities and to improve the health of individuals and communities across the country. Healthy People 2020 is defined as a comprehensive set of national objectives for “improving the health of all Americans” (Healthy People 2020, n.d, para. 1). The Healthy people 2020, is aimed at improving the health of individuals and communities and envisions “a society in which all people live long, healthy lives” (Healthy People 2020, n.d, para 4). A short priority list was developed and contains twenty-six objectives knowns as Leading Health Indicators (LHI). The list of objectives was created to prioritize health issues that must be addressed and to find appropriate actions to take in order to improve the health of the population.

When World War II ended in 1949, the debt grew at a slow and steady pace for the next 20 years. When the Vietnam War began in the 1960's the debt accelerated sharply. Thanks to the growth of television and news media, growth of the deficit was widely publicized. For the first time, the American people were given access to what was going on with the nation's debt. When the Gulf War began the early 1990's, the national debt reached a trillion dollars for the first time. By the end of the Gulf War, the government decided to make amendments to fix the continuing problem with the deficit. Despite those promises to reduce spending, the debt is currently at it highest point ever.

The financial crisis of 2008 has been described as the worst financial crisis the world has seen since the great depression, but there are now murmurings of the potential for an even greater financial crisis, a currency crisis, caused by the demise of the US Dollar. The Dollar has been the reserve currency of the world since it took over from the Pound at the end of world war two, but we examine if it is about to crash spectacularly?

1A. Market failure is a situation in which the allocation of goods and services is not efficient. In any given market, the quantity of a product demanded by consumers does not equate to the quantity supplied by suppliers. This is a direct result of a lack of certain economically ideal factors, which prevents equilibrium.

This paper will attempt to answer the question: Is the federal deficit and government deficits in general a good or a bad thing? While it may be easy to lose sight of how the government chooses to handle its money, it is also important for citizens to be conscious of how their money is being spent, and whether or not the current course that the government is plotted on is either sustainable or the best allocation of resources.

An alarming fact is that that US debt clock ran out of digits and we need a new one to add more digits. Economists Hamilton states our actual debt is closer to 701 trillion since we are not counting unfunded liability; social security, Medicare, Etc. Our economy needs growth, but it is only at 2%. We are paying interest instead of going to growth in the economy. The facts about our economy are that unemployment is down, but wages are not growing enough. Inflation is stable at under 2%, and interest rates are low. Since the 1940s the economy is generally in a deficient. In order to help a slow economy, the government uses fiscal policy to counter. A big issue to me was the cost of health and social security and how this is such a big part of

The deficit was expected to increase another 20 per cent in 2004, to US $150 billion. http://goliath.ecnext.com/coms2/summary_0199-3700728_ITM

Meanwhile, bond yields have increased in anticipation of a rise in inflation. Much will depend on the Fed’s ability to cap any subsequent rise in inflationary expectations to prevent a nasty upside overshoot in yields. The speed of any increase in bond yields will also depend on how any easing of US fiscal policy is financed. In the 1980s, under President Reagan, the US began running large current account deficits that subsequently became chronic. The source of the external deficit was a sizeable federal government budget deficit, courtesy of large increases in defence spending and aggressive tax cuts. Meanwhile, the US domestic private sector was running insufficient financial surpluses to meet increased federal government borrowing. Thus, this outcome consequently meant that foreigners were the major source of funding of the US federal government’s budget deficit during the 1980s. Given the US government borrowed in dollars, foreign lenders began demanding an exchange rate premium on Treasury bond yields, particularly after the Plaza Accord in September 1985. It was the willingness of foreigners to fund US fiscal expansion before the Plaza Accord that enabled the US economy to recover very strongly in the aftermath of the deep 1981-2 recession. The current environment is, however, very different to the 1980s, given the proximity of

*As the day goes by almost never-ending so to will the U.S. budget continually growing. However, in the previous years the deficit has sharply declined from one year to the next. Specifically, in 2014, the deficit in total, was 514 billion (2014). Yes, 514 billion dollars is unbelievable, yet this number is surprisingly less than what the United States had previous to new laws being implemented. Specifically, in 2009, the deficit was 1.4 trillion dollars (2014). This trend is highly permissible, however is this decline something that we may expect to occur in the next decade. Unfortunately, as the Congressional Budget Office states, “Under current law, deficits will drop through 2015 but rise thereafter, boosting the already high federal debt, CBO projects. Economic growth will be solid in the near term, but unemployment will not drop below 6.0 percent until 2017” (2014). With the aforementioned statement, what will the deficit impact in the next decade? Feasibly one may conclude that when the deficit rises, so may other portions. Particularly, the size of the economy will open-endedly flourish, with this so will spending. Unnervingly, spending will grow more rapidly than the GDP as the age of our population grows, so will their contributions to the economy. These contributions as the CBO states are, “the expansion of federal subsidies for health insurance, rising health care costs per beneficiary, and mounting interest costs of federal debt. By contrast, all federal

Throughout most of the country’s history, the United States’ federal government maintained a reasonable level of national debt. For example, the total national debt in 1981 was $998 billion. Since then, however, the government has generated significant budget deficits, and the level of debt has risen to $16.7 trillion in 2013 (Calleo, 39). Budget deficits are caused

The Eurozone is facing a serious sovereign debt crisis. Several Eurozone member countries have high, potentially unsustainable levels of public debt. Three—Greece, Ireland, and Portugal—have borrowed money from other European countries and the International Monetary Fund (IMF) in order to avoid default. With the largest public debt and one of the largest budget deficits in the Eurozone, Greece is at the centre of the crisis. The crisis is a continuing interest to Congress due to the strong economic and political ties between the United States and Europe.

A similar proposed, but not enacted, solution was suggested called the European Stability Mechanism, a permanent system put in place to replace the fleeting EFSF and EFSM.10 Another proposed solution, popularized by Jakob von Weizsäcker and Jacques Delpla, are what are called “Eurobonds”.11 A so-called Eurobond is where investors loan some money to the European Union at a certain interest rate (among the notable opponents, Germany starkly disagreed with this policy, remarking that it is frivolous to make borrowing easier for countries in which the very cause of the problem was too much borrowing)12. Additionally, the European Central Bank (“ECB”) has also intervened in various ways.13 The aforementioned methods include, most prominently, a pledge to pursue all avenues necessary to help the debt-ridden countries meet their fiscal objectives for this year and the years to come. What these solutions are all lacking is a collective power to enforce fiscal responsibility. If PIGS are all bailed out utilizing the EFSF and the EFSM, along with the process of sucking dry the ECB, is there any telling whether or not they can use the money productively, or, if the governments do, can they maintain their path along

The US economy was the first to enter recession (2007), and the first to see the effects of the housing crisis seriously impact the banking system (2008). However, thanks to strong measures to re-capitalize the banks the US banking system is now clearly on the road to recovery. US households are also making good progress in repairing their balance sheets. The prospects are for continued slow growth of personal incomes (about 3% p.a.) at a rate that exceeds inflation and therefore supports additional savings and further debt repayment. However, US growth depends on successfully navigating the so-called “fiscal cliff” – the effective increase in a range of taxes (due to the expiry of several tax cuts enacted previously) amounting to $400 billion, together with automatic spending cuts amounting to about $90 billion, for a combined total cut in the deficit of close to $500 billion in a single year, (Visser, 2014). The re-election of President Obama feared that a renewed recession would be enough to enable the two sides in the US Congress to reach some kind of compromise, although not perhaps to the extent of fully erasing the threat to the US economy. Consequently there was another year of roughly 2% GDP growth in the US in 2014.

Carbaugh (2011) asks, "Can the United States Continue to Run Current Account Deficits Indefinitely?" (p. 361). Ultimately in the long term the answer is no, but the question could be rephrased to ask: (1) Does the United States' unique position in the world economy allow the country to safely run persistent external deficits? and (2) can persistent U.S. deficits in the current and payments accounts be adjusted without bringing about economic recession or crisis? Japan, China, and Middle Eastern oil countries have enabled this deficit to continue by heavily investing in U.S. Treasury securities (Carbaugh, 2011). Because foreigners desire to purchase American assets, Carbaugh (2011) concludes that “there is no economic reason why [the