Why the U.S. can still spend a lot of money in a world in crisis
Consequences and possible solutions
Table of contents
Pages
1. Introduction……………………………………………………………………………………………. 3
2. Methods of research………………………………………………………………………………… 3
3. Background……………………………………………………………………………………………… 3
4. Findings…………………………………………………………………………………………………… 4
4.1 Why the US has economic power……………………………………………………………. 4
4.2 The current problem………………………………………………………………………………. 4
4.3 China as major owner of the US debt………………………………………………………. 5
4.4 Chinese proposal: Is it the end of the dollar as a strong currency?……………. 5
4.5 A warning ……………………………………………………………………………………………… 6
5. Conclusion………………………………………………………………………………………………. 6
6. Recommendations ………………………………………………………………………………….. 7
7. Reference………………………………………………………………………………………………… 8
1. Introduction
The report’s purpose is to explain why the United States Government has continued to
spend when most of the countries of the world are on an economic crisis and why they
have to stop doing it.
2. Methods of research
This investigation is based mostly in secondary resources like the book “The coming First
World Debt Crisis” Ann Pettifor, some on line articles and some webpages. For more
details please refer to the bibliography.
3. Background
As it is known, there is an economic crisis affecting the countries of the developed world.
They are all taking measures to improve their current situation. For example, Greek budget
cuts. But there is a country that does not seem to take any action even though it is also in a
crisis. This is the United States. As we can see on the following chart, they are not doing
anything about the current problems and furthermore, as it can be seeing on the chart they
have been increasing their spending over the years.
In September of 2012, “The Obama administration hoped to go to Congress soon with a
plan for using $1 billion in debt relief to help Egypt stabilize its economy and expand its
private sector” (REUTERS, 2012). This could have helped Egypt a lot, especially after
their political instability. However, it also harms the US economy because they already
owe over US$ 16 trillions (US Today, 2012) and that billion could help them to decrease
their debt.
Finally, the measure didn’t take place for political reasons (Crescent online, 2012). Even
when the measure didn’t work it is important to highlight that it was not for economical
reasons. This is an example of US politics. A country with that amount of debt should be
taking measures to reverse it situation and not to increase it.
4. Findings
4.1. Why the US has economic power
