Consequences of the Debt-Based Money System – Assignment Example
The paper "Consequences of the Debt-Based Money System" is a brilliant example of an assignment on macro and microeconomics. Debt rate always impacts on consumers and producers by the change in demand and supply. The implications of debt include: increase in prices of goods and services (transportation costs, manufacturing costs, capitals costs, etc), low purchasing power of the consumer to buy goods and services at their purchasing power ability, excess supply of products and services in the markets but a very few buyers, increase in unemployment rate, low wages for the labor force, excess burden of loans, imports of cheap products, less spending on environmental policies, high inflation rate in the economy that is a negative turn for the producers, not impressible role at international trade, rise in exports, pressure of foreign debts, etc (Greaves, 2001). By analyzing different reports about the US economy, it is predicted that in case of failed economic policies of a government, the foreign debt can increase by 0.5 percent per year. foreign ownership of foreign ownership of US government debt can result in form of great recession, which influences the fiscal and monetary policies by bringing changes in the markets. Debt problem ever needs proper legislation to solve out the economic problems by keeping balance in demand and supply at an equilibrium level. Foreign debts have become a serious cause of the expected high rate of unemployment in the US, which is an alarming situation for US economic growth(Politi, 2012). CBO (a nonpartisan agency) calls for legislation for financial matters to be settled by the government. Some Presidents of US, such as Obama, and Mitt Romney ever focused on the solutions of budget plans to settle the foreign ownership debts. Tax reforms are also one of the priorities of the US government (Politi, 2012).