Economic Objectives of the United States over the last three years Essay

Economic Objectives of the United States over the last three years - Essay Example Unfortunately, discretionary macroeconomic policies and a volatile environment of the US were closely related to awkward policies such as excessive government spending, high inflation, and an over-valued exchange rate render an economy prone to crisis. United States Government has always believed in broad consensus that exist on the utility of inflation-indexed or inflation linked bonds for which economists and policy makers make the sharing of risk between issuers of bonds and investors possible. In this context financial markets in the emerging market economies are deepened and when an emerging market government issues inflation-indexed bonds, this is seen as reducing the cost of educating the global investors regarding the benefits of these instruments. Though such policies in the past have reduced the co-ordination problems, but has left the most frequent areas devoid of discipline and these are the regulatory norms and supervisory structures. Today, the way the US is breathing a n unstable macroeconomic environment, these vulnerabilities of the financial sector readily spawn a crisis because of distortions in the real economy and serious macroeconomic policy.The macroeconomic policies or the economic crunch being witnessed for the last few years has not affected US military expenditure, since it has kept on increasing by 59 percent since 2001 and it is obvious that such increase reflects massive spending on military operations in Afghanistan and Iraq, however it also includes increases in the ‘base’ defence budget.... Policies regarding public finance claims that only the most central, national government can successfully manage US economy's macro-economic swings and the resulting unemployment of labour and economic resources. The macroeconomics in this case does not held itself responsible for the inability to alleviate unemployment because it suggests that the mobility of factors of production in any economy and the inclination of a region's residents to spend their incomes on imported goods are responsible factors behind the raised unemployment rate (Inman & Rubinfield, 2001). Unemployment Compensation programs in the light of policies have been relatively modest in scale that has covered potential benefits during all these years of recession, however their duration is short and replacement rates are generally low. Recipiency rates are also relatively low (Vroman & Brusentsev, 2005: 145). The policies advice that many aspects of these programs highlight the association between inflation and Unemployment Compensation replacement rates without effective indexation provisions, high inflation would quickly erode the real value of monthly benefits (ibid). The main factor that explains why international trade and capital movements instead of other economical concerns have become a major concern of senior policymakers in the United States is the acceptance by all governments of responsibility for how well or poorly the domestic economy performs. The policymakers claim that the electorate's demand for a steady increase in the standard of living indicates that any policy that significantly affects domestic economic performance is an important variable in determining who is president and which party controls the