Sunday, November 11, 2007

Week Nov. 12- Nov. 19 Assignment 1

1) In the U.S. economy is growing, the unemployment rate is low and employment is close to getting full. The U.S. should strive for this every quarter because it means that more people have jobs, higher wages, better income, and the economy is growing. Most economists want every quarter to have a goal to have a low unemployment rate because of the benefits it has towards the economy, but some disagree with the idea. The reason for this is because of when the unemploymenr rate gets too low it creates inflation and it doesn't go away, it creates an inflationary spiral. Even though the fear of inflation is a big part of this plan, the reality of a weak economy because of a weak foundation. There also is an uncertainty with the plan with the guiding of policy makers to construct the right plan so that what can come out of it is no inflation. The best argument for these two sides are the realities of a stronger economy with more jobs and more money versus the weak plan of less inflation that might occur. The idea of striving for a stronger economy will always beat the idea of less inflation because what will come out of the plan. More jobs, better income, higher wages, and full employment creates a strong base and shouldn't falter rather than a plan for more unemployment becuase of an idea to reduce inflation. This idea would not work because of the reality of a weak economy that could crumble as the inomce, labor force, jobs, and wages decrease.

2) To succeed with the ideas that are given by economists, there needs to be a lot of people that agree with the plans. The plans that could be done for the idea of striving for a low unemployment rate consist of The House Plan, The President's Plan, and Senator Baucus's Plan. The House Plan would distribute balances from federal unemployment insurance (UI) trust funds to the states to strengthen their ability to pay UI benefits and provide job-placement assistance. It would appropriately leave specific UI program changes to the discretion of the governors and state legislators. The President's Plan would increase spending for National Emergency Grants to states to extend and expand UI benefits. In addition, it would create a temporary extended UI benefit program that would target states with the largest increases in unemployment. Senator Baucus' Plan would create a broad temporary extended UI benefit program for all workers who reach the limit of their regular state UI benefits and would also place three new federal mandates on state UI programs. These plans were revealed to make low employment rate a reality and for a stronger economy to occur. There is also the plan to make increase the unemployment rate so there is no employment. The plan was given by the NAIRU and they wanted to strive for the unemployment rate to increase. The plans that were revealed for each idea had there own benefits and also had cons.

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