The Overall Economic Challenge the US Is Facing Today Focusing on Both Research Paper

The Overall Economic Challenge the US Is Facing Today centre on Both Domestic and International Issues - Research Paper ExampleThe US market compete a key role in the economic recovery promotion thanks to its openness. However, the situation radically changed in 2001. With the sudden failure of the capital spending boom, the U.S. economy found itself in hard times. Fuelled by a number of serious economic challenges, the present recession seems to be long and quite displace out. This paper examines close to economic challenges faced by the U.S. today, both domestically and internationally. It is based on the survey of a range of peer-reviewed articles in the field that focus on various aspects of the U.S. economic challenge. The paper identifies some common themes in the sources explored, as well as attempts to provide solutions to the questions raised. Inflation and Budget Deficit as Major Economic Challenges A well-known American economist Shapiro says that inflation is one of the signs of the economic strategys lack of capacity to handle its copious responsibilities. He defines inflation not as a purely economic problem, but above all the problem of social and political origin. Shapiro writes, To understand the elementary underlying causes of inflation, we must ask ourselves why our government has persisted, through Democratic and Republican administrations alike, in qualification the political choice of running large budgetary deficits and financing these, in part, by increasing the hand over of money. (Shapiro, 1981, p. 145). Therefore, combating inflation is inseparably linked to overcoming the budget deficit, which has grown enormous in the last decades. Shapiro explains that the current inflationary policies are not the result of incompetent governmental acts. They rather illustrate the response of the government to the pressure level on the part of those constituents that demand increasing and additional benefits from the government, yet do no t want to accept tax increases.