Essays on Public Debt

The term "demand" in economics means payment need, i.e. need that the subject is able to pay. From this definition it follows that the demand for a particular commodity (service) depends on the price. This means that the increase in commodity prices will lead to a decrease in demand, and, conversely, a decrease in prices will lead to higher demand. The relationship between price and quantity demanded is stable. (Agarwal, 2013) The cause of the change in demand is change. This reverse causal relationship between price and quantity demanded is the law of demand. The law of demand manifests ...

Money and prices in the long run and open economies dictate the financial market. As such, that is why factors such as domestic variables and foreign monetary policies are over-emphasized. Demand for money is thus affected by the domestic variables, which include interest rates, price expectations, and permanent income, among others. As such, this paper explores the financial market to reveal the viable strategies the US can adapt to secure reliable money and prices in an open economy on a long-term basis.

The state of US Financial Market

Over the years, the economy of the US has been in good shape, especially when compared to ...

Increase Government Spending to Fight Recessions

Introduction Government spending as a recession recovery tool has been the subject of debate numerous times. To date, there is no definitive proof of its success or failure of its application. An active fiscal or a monetary policy is the sum total of the actions taken as a reaction to the current economic conditions; the government chooses to use a specific policy to deal with something in the economy (Mankiw, 2001).

Government spending as a method for lessening recession is a tool that has been proposed and even applied by many governments when they are experiencing a recession. This ...

Abstract

The current paper explores the main differences of the Great Recession in 2007-2009 from other economic collapses in the history if the United States. Section I discusses the general features of a recession and describes the main responsibilities of the National Bureau of Economic Research. Section II is devoted to the comparison of the Great Recession with the recession of 1980s. The section is divided into four subsections. Subsection A presents the basic comparison of recessions in the U.S. history and explains the choice of the 1980s period for the further comparison. Subsection B explores differences in unemployment in ...

Introduction

The exchange rate has become an integral component of modern economics. Its role stems from its far-reaching effects on the economy of a country, investments, the profitability of firms, and personal finances. Countries have become even more interdependent due to the rapid advancement in communication technologies and the expansion of global trade, which have significantly reduced the geographical distance between both individuals and countries. However, since nations use a broad range of domestic currencies with different values, trading partners must, therefore, rely on currency conversion methods to facilitate global transactions. This paper explores the importance of exchange rate and ...

Introduction

The topic of discussion looks at establishing the extent to which China appears to be a threat to the United States. In this topic, there will be need to evaluate the relations between China and the US and determine the importance of the relations to the whole world. According to scholars and academicians, the relations between the two countries are very important to the economies of all other countries in the world. The supremacy of the two countries thus poses a challenge to each other in terms of who is superior to the other. However, the fact is that ...

Abstract

This paper gives an insightful preview of the Panama's economy. It analyzes key data from the current major economic indicators to comprehend the state or nature of Panam. The analyzes espouse data and statistics drawn from the Panamanian Bureau of Statistics and Economic portfolios. It analyzes both the endogenous, exogenous economic factors, as well as their impact on the Panamanian economy. One of the most conspicuous endogenous factors is the Panama’s unsustainable development growth models. Its economic growth mostly focuses on the economic indicators while ignoring critical and pressing aspects such as social as well as environmental problems. ...

Overview of the South African Economy

South Africa is a country located in the Southern tip of Africa. The country is the 25th largest in the world by area the 24th largest by population with 51 a population of million, (Central Intelligence Agency-CIA, 2013). It is Africa’s most prosperous economy and the World Bank ranks it as an upper-middle class income economy. Lately, various global economy agencies such as the Organisation for Economic Co-operation and Development (OECD) and the World Bank consider South Africa as a newly industrialised country (CIA, 2013). The country is now part of a team of countries that form BRIC (Brazil, Russia, India, and ...

South Africa

South Africa is one of the esteemed and has been projected for growth in the African continent. The Republic of South Africa is geographically located at the southern part of the vast Africa content neighbored by Swaziland and Mozambique to the east and Zimbabwe Namibia and Botswana to the north. Its coastline extends along the Indian oceans and the south Atlantic. On estimation, it measures approximately 2798 kilometers. The country measures an area of about 1,221,037 square kilometers (Feinstein, 2005). According to the national statistics, the country had a population of 52,981,991 citizens and ranked as ...

Credit rating of a country is mainly the ability of a country to repay the loans that it borrows both domestically and from other countries. It is mainly determined by the economic conditions that are prevailing in the country at a certain time. There are other factors that affect the credit rating of a country. This research paper will evaluate the credit rating of South Africa. The research will evaluate the cause of the current credit rating of South Africa and its effects to the country in various sectors of the economy (KRUGMAN, 2009). South Africa is a country that has a very good ...

Federalism refers to a political structure with two or more levels of government exercising control over the same territory and citizens. In a federal system, these levels consist of the federal or central government and constituent political units referred to as state or provincial or territorial governments; creating a federation. These governments are supreme when exercising power within their sphere of authority.

Power and resources in such systems are divided between the central and regional governments with some level of autonomy. The central government usually has oversight over issues of concern to the whole country while the state or regional governments deal ...

Question 1

Since the 1960s, the priorities of the federal government have been on a collision course that threatens to destroy public investments. There has been a dramatic expansion of entitlements that started under the great society. Likewise, investments have taken a decreasing share of the federal budget. As the Baby Boomers enter retirement, entitlements are expected to intrude upon an even larger part of the federal dollars reserved for building roads, educating kids and way for technological breakthroughs. This is so because entitlements are an extremely essential part of economic security and without change investments will diminish affecting the ability of the economy ...

Section A: Plan of Investigation

Most of the people in the current generation believe that war and essentially investing in the military is good for the economy. This is quite contrary to public acknowledgement and comprehension of the costs involved in case a war takes place. World War II disrupted a lot of systems the world over; America not being an exemption. This paper seeks to elucidate on the extent of damage the American was subjected to as a result of the war. Focus will be given to the macroeconomic implications of U.S policies as a result of the conflict. To achieve a sound conclusion, the paper will lay ...

- Globalization and burgeoning technology/innovation that shrink product-life-cycles, coupled with global competitor’s quality and price, brings goods to the USA adding to 80-90% mega-competition for most consumer goods sold in USA, compared to <25% in 1950’s. Equally, global companies compete severely and challenge US firms abroad. - The U.S. and Eurozone economies play major roles in the world economy and are crucially important for each other’s prosperity. The two sides combined account for around 40% of world GDP, over 25% of world trade, 60% of world foreign direct investment flows, and 60%-70% of ...

[Document title] [Document subtitle] Since 2000, Syria’s economy was being managed centrally. Supported by the IMF and the World Bank, the structural adjustment program was used by Syria. The five-year plan started in 2006 and ended in 2010. Changing the economic strategy to a liberal market led was the main purpose of the program. The contents of the plan were based on five main purposes. 1. Respecting the human rights, 2. The rule of law, 3. Making sure the society participates in the political process, 4. Preparing the economy to a social market, 5. Making sure the ...

Principles of Macroeconomics: The Importance of National Debt

Introduction National debt is a popular term that is heard on the news or read in the papers and is utilized by economists, politicians, opinion-providers and academicians to refer to an economic concept whose importance transcends social status and location. National debt is defined by CNBC as the summation of all the debt owed by a country’s government . National debt is composed of the amount borrowed or the principal plus all the interest payments levied on the principal amount. National debt is important because it funds government programs in cases wherein the government has not collected enough revenue from ...

Introduction

Globalization and other factors are driving international businesses and trade. In that respect, multinationals are increasingly becoming subject to factors that are not only born in their home country, but also from host countries as well as markets within which they sell their products. One such factor is the exchange rate that determines the value of the payments that exporters receive for their international sales as well as the value those importers pays for their purchases from foreign markets. In that view, it is becoming crucial for managers and business leadership to establish suitable strategies for managing the risks ...

International Project Finance

Executive Summary The project for mining in the hinterland of Peru Mountains is studied as a case in the paper. The Antamina projects as it is called is studied for numerous management aspects of Industry, Finance, Human resources and other international finance aspects. The financial aspect of project completion is an important part of overall banking regulations is determined. Also the design of workforce, stakeholder dialogue in irrefutable and complex circumstances indicates the strength of community and social impact of such projects. The investment commitment is a particular emphasis as also the promulgation of management think on how to cater ...

The economic crisis in Egypt post January 2011

Abstract The paper looks into the economic crisis in Egypt and how the background was formed for the January 2011 revolution. How the crisis happened, what were the consequences and how Egypt can get back on track are some of the important questions that need to be looked into. The stability of the Mubarak regime was well under pressure even before the major changes in the political system followed. Even before the present revolution and reforms in Egypt, there were significant changes taking place in the political system. The nation was experiencing relative freedom of expression for the ...

Introduction

The U.S. is moving ahead on a dangerous budget path. With the current spending and debt already treacherously high, the future debts are expected to rise even higher. It is certainly a serious matter when public debt is expected to reach 90 % of GDP (Boccia). The implications would be severe as the larger debts would increase interest rates, horde private investment and raise price inflation. U.S. policymakers should take lessons from Greece and Japan to avoid a fiscal crisis and economic stagnation that occurs due to public debt overhang. Growing federal debt in U.S. could lead to a sudden fiscal crisis, and this ...

Role of China in US Debt Crisis

Article Summary James Dorn (2013) has described the pressures within China that force it to hold a substantial proportion of US debt. Dorn proposes measures to ease the internal fiscal pressures of China so that global financial stability and harmony can follow (Dorn). China holds 8.4 % of the US gross public debt. The Chinese holdings of US Treasury bonds are, however, only the consequence US debt, not the cause. The real cause of US debt is overspending and excessive entitlements in Medicaid and Medicare. However, the financial repression of the Chinese economy has had an impact on the ...

Introduction

Lately, the United States has been trending on a wrong path occasioned by their current budgetary hurdles. The current federal spending and debts are considered to be too high that it will take numerous generations to clear the debt. This is further complicated by the projections given on future spending and debts. The spending and debts are projected to rise by more than two-fold, largely due to increased entitlement spending. It is, therefore, clear that the current American economy will lead to the stagnation of future generations. A variety of academic research has pointed to the likelihood of the United ...

INTRODUCTION:

Walmart is one of the largest retailers of groceries, pharmaceuticals, medicines, and home entertainment products such as movies, and children action figures. Walmart works on the principle of always providing “lowest possible costs” to the customers. The slogan used by the company since its inception is “Low Costs – Always”. Walmart has been able to live up to its name and has always provided goods at cheaper rate than its competitors and other retailers in the country. Currently, Walmart is present in many countries around the world. Some of the prominent countries where it is present are the USA, the ...

What led the British to occupy Egypt in 1882? Besides the fact that it was the result of colonial expansion, and the spirit of colonialism was fueled by British imperial hegemony, what benefits did Egypt have financially for England? In this paper, the factors that took place before the British occupation, the actual occupation itself, and its aftermath, will be discussed from the point of view of economic history. Cotton, the American Civil War, an overspending khedive, the Suez canal construction, jockeying Europeans countries, and the cosmopolitan makeup of 19th century Egypt all play a part in the story. In ...

Egypt Economic Issue

Rising Public Debt Since the revolution that overturned the rule of Hosni Mubarak, Egypt has experienced several challenges from the social, political and economic fronts. On the economic front, there have been issues of foreign direct investments, debt crisis, increased level of prices and the gross domestic product. The economy has been experiencing shocks as a result of the need to acquire social justice with the high prices of basic goods eroding the confidence the confidence in the economy. The domestic public debt in Egypt has skyrocketed since 2009 from a 45.7% of the gross domestic product to 72% ...

For many years, financial crises have been believed to be the preserve of the developing countries which are believed to be more vulnerable than the developed country as explained in the video “The Financial Crisis & Public Debts Explained in Detail”. However, this notion was overturned in the year 2007 – 2008 financial crises that hit the ‘great’ countries in the world. From this experience, it is evident that all countries are at risk of experiencing financial crisis regardless of the policies in place. Nevertheless, the approach towards the arrest of the crisis is what defers. In developing countries, the effect ...

Hamilton and Jefferson are prominent for their titanic rivalry. The rivalry between the federalists and antifederalists reflected a profound impact on American history. The federalists represented by Alexander Hamilton represented the urban mercantile interests of the seaports while antifederalists led by Thomas Jefferson represented the rural and southern interests. A debate between the two was about the power of the central governing verse that of the states where federalists favored the former and the antifederalists advocated for states’ rights. Despite their rivalry, both men believed in the revolutionary doctrine of natural rights. They both believed that the main role ...

Greece-Euro Crisis: A Background

In 2001, Greece became the 12th European nation to get the membership of the EU, and endorsed the Euro as its single currency of the continent. The country got the EU membership that would put Greece strongly placed in Europe. Nevertheless, even then a number of economists were afraid that the Euro's stability could be affected by the inclusion of weaker countries from the European region. With the aim of qualifying for Euro membership, Greece was required to adopt stringent austerity steps, mostly through massive cuts in public expenditures. When the euro was launched in global financial markets in ...

Abstract

Mexico is the world’s 12th largest economy in terms of Gross Domestic Product ($1.657 trillion), growing at an average rate of 3.8% annually. With a 47.7 million labor force, Mexico has GDP per capita of $15, 100 which is the 81st highest in the world. Mexico’s leading industry include food and beverages, tobacco and cigarette production, chemicals, iron and steel manufacturing, petroleum, mining, textiles, clothing, manufacture of motor vehicles, consumer durables, and an active tourism sector. Ninety percent of Mexico’s trade is under free trade agreements with countries from the whole North America, most of Central America, ...

Report

Executive Summary The economic evaluation of Medicare as system of efficiency in the U.S. insurance sector economy of scale is analyzed according to U.S. Senator Cantwell’s Affordable Care Act 2010, enacted as a reform measure to overhaul the existing Medicare fee-for-service payment system. The report addresses Medicare’s Value Payment Modifier (VPM) replacement of the former volume cost instrument used by the government agency, as well as the value-based index (VBI) to be used by Medicare providers within the national health care delivery system by 2017. - Introduction The report examines U.S. Senator Cantwell’s (2013) ...

Introduction

The economic rationale for aid is to boost rate of growth in the developing nations. Ghana is a developing country that has relied on economic aid from independence. Aid from the international financial institutions are mainly invested which is fundamental aspect in enhancing growth. Ghana has been a regular recipient of these funds since domestic funds are not enough to meet investments desires and also the challenge in balance of payments where imports are more expensive than exports. As such, country needs to borrow funds to cover the deficit. Foreign aid has been used to finance various public services that ...

Catholic Charities are among the largest charities located in the United States. Catholic Charities is a non-profit agency, which was founded in 1910 as the National Conference of Catholic. Catholic Charities is a network of charities whose goal is "to provide service to persons in need, to promote for justice in social structures.” As what is stated on the Catholic Charities main website, in 2008, Catholic Charities agencies served more than 8 million individuals. Catholic Charities received in grants approximately $2.9 billion from the federal government in the year 2010. Comparatively, the organization’s annual revenue was $4.67 billion. Approximately $140 ...

Drowning in Debt: How Does the U.S. Solve its Debt Crisis?

Scott Walterhoefer Abstract Can the United States solve its debt crisis? That is the daunting question that currently confronts our nation and the manner in which the “powers that be” attempt to deal with this problem will dictate the political and economic landscape for the foreseeable future. The sheer size of this debt (roughly $16 trillion) is so massive and seemingly out of control that it is nearly impossible to fathom. This paper will examine this debt and the factors that caused its exponential rise over ...

Scarcity in my life occurred when I saw my brother fail to continue with his masters because I was also going to high school. Since the resources were scarce, he was to forgo doing masters so that I could continue with my high school studies. The opportunity cost of me going to high school is my brothers’ failure to continue with master’s degree. The sacrifice was worth making since I also needed to continue with my studies to become a reasonable person in future. When federal budget is being made, the trade off comes in because the government ...

Introduction

The budget deficit and the amount of public debt is an important indicator of an economy. This area of concern has traditionally received much attention. The budget process involves the balancing of public revenues and expenditures. Budget imbalance means quantitative disparity between income and expenditure budget. The excess of expenditure over budget revenues is called the “budget deficit.” The unbalanced budget could lead to the emergence of a surplus, ie excess of income over the expenditure. However, in practice, almost all countries now, there is significant scope for excess government expenditure over income. The result is a rapid increase in budget ...

United States public debt can be defined as the money borrowed by the United States government by the issue of treasury and other securities. The public debt consists of two main components. The debt which is held by the public such as the Treasury securities held by investors. The debt which is being held by the government accounts and includes the non-marketable securities. The debt ceiling is the maximum amount of debt the United States government can have at any given time. On 31st December 2012, the United States government reached its maximum capacity to issue debt to ...

How the Developing Market Escaped the Debt Trap

1.0 Introduction The debt crisis between the years 2007 and 2008 had huge impacts on the performance of many economies across the world. This saw many industries in such economies collapse while others report very poor performance as a result of lack of funds to invest in them. This is because many people who had funds were afraid of losing their hard-earned money were they to invest it in the various industries. Moreover, people had lost confidence in the financial institutions and were therefore afraid of investing any funds in such sectors for fear of losing their investments. This ...

Question 1

As president Barrack Obama’s second term of office comes to an end, several observations can be made about some of the positive and the negative effects he has had on the welfare of the American citizens as well as the country in general. Some of the achievements that Obama was able to realize include the fact that he influenced the congress to come up with better regulation on pertinent issues such as the rights of the gay people and immigrants. The topic of gun control is another contentious issue that president Obama also managed to address during his ...

Introduction: History of the National Debt

A debt crisis is a national problem of countries with regards to their ability to repay borrowed funds. It deals with national economies, national finances or budget and international loans. The meaning of a "debt crisis" has changed over time. The main definition comes from the main financial institutions such as Standard and Poor's or the International Monetary Fund (IMF). Basically, a debt crisis is defined as an occurrence where a national government cannot pay its debts and it the process, asks some assistance (Zuckerman, 2011).

The US national debt represents an "existential threat" to its federal finances. It evidences the country’s ...

Abstract

Since 2007, the European markets continued to experience a decline as several European nations had felt the consequences of applying the unstable Euro into their countries that had influenced the nation’s economic instability as seen in the case of Greece, Ireland, Italy, Spain, and Portugal. In recent news, the European debt crisis continues to prevail as the Eurozone reaches its all-time low for the past5 years as both strong and weak European markets now enter a state of recession that affects the entire world market. With the current European Debt Crisis continuing to influence the European markets, the United States may ...

The following paper talks in length about the US National Debt and how the entitlements play an important role in the current crises. The effects of the debt on these entitlement programs and the borrowing of foreign money in order to sustain are discussed in the paper.

Money is borrowed by the federal government by issues debts wherein marketable securities from the treasury notes, bonds, treasury bills etc. are sold to other federal government agencies, businesses, individuals as well as businesses, people and government from other countries. When the money is returned back, an interest is paid for using ...

Perhaps the most equivocal contributors in the debate on policies of public debt and government fiscal policies in the economy are undeniably David Ricardo and Thomas R. Malthus. This paper undertakes to analyse David Ricardo and Thomas Malthus’ debate on public debt policy and the role of government in an economic system. Though they argumentatively differed, they did agree on some views such as the inefficiency of government spending. Ricardo argued for redemption and government restriction whereas in contrast Malthus was against wiping off public debts arguing that doing so would depress aggregate demand in the end. The two ...

In recent news, the problem of the Eurozone has been in the interest of various countries due to the economy’s influence over the World Market. While some of the older members of the European Union managed to apply the Euro without many effects in their economies, other member had experienced various financial problems such as debt and increased inflation. Now, these troubled EU member states are facing complications in recovering their formerly stable economies. This problem is still currently present in some member countries, with Greece being the centre of the current economic problem of the Eurozone. Before ...

Based on the economic state of affairs in Greece, the Greek government in collaboration with international economic organizations, especially the International Monetary Fund (IMF), is in the verge of implementing various structural revenue-side and spending-side economic reforms. Besides, the government, alongside IMF strongly advocate for the mass privatization program to help open investment opportunities, increase level of funds and to boost the country’s growth potential. The IMF is a financial institution recognized internationally for its promotion of exchange rate and monetary stabilization. Specifically, the International Monetary Fund has advocated for the following to help stabilize Greece exchange rate and ...

The United States is a federal country that has a large economy as a result of the fast-economic resources found in it’s over fifty states. In order to achieve continued economic stability, the United States has put in place well structured systems and programs that guide its policy on revenue collection, government expenditure and other monetary policies. This has been done carefully to grant the semi-autonomy status of its sates a clean bill of health. It is a fact that the monetary policy enshrined in the United States constitution and the mandate given to various constitutional officers play a great role in influencing and ...

Question 1

Answer for Student 1 According to the article governmental expenditures can be subdivided into two categories: discretionary and nondiscretionary. Discretionary cost is the one federal government faces when paying for special items, which are included into the budget every fiscal year. Nondiscretionary expenditures are determined by entitlement programs, such as Social Security and healthcare, thus they are formula-driven and cannot be changed in the short-run. Both of them have contributed a lot to the current debt, however, nondiscretionary expenditures also persist, therefore taxpayers will pay more and more to cover these costs. Hence, the tax burden will continue to grow, ...

EXTERNAL DEBT SUSTAINABILITY OF U.S: A NONLINEAR APPROACH

Abstract The main objective of this paper is to carry out an investigation of the sustainability of external debt of US through a non-linear approach. We are first going to test the non-linearity and non-stationary nature of the data simultaneously. We are then going to test the linearity of the ratio against the threshold autoregressive using the TAR model. The US debt sustainability has been an issue of global concern for quite some time now. We are going to analyze it using the MS unit root test which is applied to the debt flow for the current account. The ...

Introduction

An economy of a country goes through different cycles. There will be periods where there will be a boom and at other times there can be a recession. In the Western world the period 2007 to 2009 was a tough period as the economy went through a recession. Many people lost their jobs while others lost their homes. It is estimated that a total of 8.4 Million jobs were lost during the recession period. Mortgage products were the worst hit. Governments came up with measures to stimulate the economy. The American government spent a lot of money bailing out banks and mortgage companies.

There are two ...