obamaPresident Barrack Obama has recently expressed dismay with GOP members of the House of Representatives that seem (to him) to put politics above solving the nation’s economic problems. In particular, the president wants the house to approve further spending programs with an eye toward fixing the nation’s stubbornly-high jobless numbers. His latest push focuses on an effort to spark “new energies” within the U.S. economy that ensure it remains the largest and most diverse in the world. The president has proposed a cut in the corporate tax rate as a sweetener to get republicans to support his latest programs, but is running into some stiff resistance from the opposition. Economists like Paul Krugman are strong supporters of the notion that it is up to the government to spend in lean times to offset the “hole” in spending within any economy that is brought about by the actions of thrifty savers unable or unwilling to spend. For their part, the GOP members of the house have expressed a different approach to economic growth — they believe it comes about from paying down debt first.

A failure on the part of the U.S. government to come to some agreement on how to best deal with the nation’s sluggish growth and high unemployment rate can not only delay any recovery, but do significant damage to the global economy if the U.S. should slip back into a recession. The original recession began in 2007 and “officially” ended in 2009, but its effects linger on. Many economists believe that the only thing that saved the world from an event similar to the Great Depression was the injection of liquidity by world leaders to keep their economies afloat. Political bickering between the Whitehouse and congress subsequently eroded the nation’s confidence in any kind of government stimulus, and it was left to the Federal Reserve to shoulder the remainder of the work for propping up the economy using something they termed “quantitative easing” or simply QE.

 

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