The U.S. National Debt and GDP Growth Rate Assignment

The U.S. National Debt and GDP Growth Rate - Assignment Example Since the recession has hit the economy, around 7.2 million jobs have been lost. In 2008, 3.2 million jobs were lost and the year 2010 has beaten this record. Unemployment has now risen to 10 percent. This is making the economy worse and putting more of deflationary pressure. The additional stimulus that the government is planning to make consists of $200 billion of which only $50 billion will be spent towards job initiatives. (Whitney, M)Â  The inflation rate at the beginning of 2010 stood at 2.6 percent and has gone down to 1.2 percent by October. (Inflation Calculator) In 2009, the GDP growth rate for the economy was negative, 4.9 percent but improved and went up to positive 5 percent by the end of the year. In 2010, the rates fluctuated around 2.5 percent. (Trading Economies)Â  Fiscal and monetary policies are used to serve the economy and help it function in a better manner. These tools have always been used by the US government, but to better help the economy, they need to be adjusted. The government needs to keep a check on the interest rates and the flow of money within the economy. The monetary policy mainly controls the money supply and consists of three tools; discount rates, required reserve ratio, and government securities. The fiscal policy revolves around the interest rates and comprises of; government spending and taxes. (Willingham, P)Â  In my opinion, the government needs to reduce taxes, this will stimulate spending in the economy, which will boost production, which will create jobs and provide people with a higher disposable income. On the other hand, the government can also reduce interest rates which will increase investment, more jobs will be created, people, in general, will have higher spending money, which will further boost the economy and increase production.