Final Presidential Essay (katmaybeck)

Final Presidential Essay

(Chicago 2)- Economical Solution by Katrina Beck

How and when will this agonizing recession in our country come to an end? With the numerous economical issues growing more problematic each day, President elect Barrack Obama is going to need a concrete and successful plan to lead the nation out of this horrible declination. As inauguration day approaches, people are becoming increasingly anxious to see how Obama will work to turn this situation around and are wondering how much longer they will have to endure it. This economic collapse is amongst the worst ever seen in our nation’s history since the stock market crash of 1929, leading to The Great Depression, the worst economic deprivation of our time. This disaster keeps recurring and it is as if we are living in “déjà vu.” We need to make major changes in the way our government supports its working people and restructure the tactics being used. For these transformations to take place, the president needs not only the help of his cabinet and official branches, but most importantly the citizens of America. We can no longer hold back any expert ideas we may have. In this state of crisis, it is absolutely crucial for us to take a stand and finally reveal our desires for a renovation of the government system.

In order to conduct any type of solution for this problem, we must first take a look at the causes of our greatest downfall in history, The Great Depression of 1929. A combination of many different factors led to this atrocity, but the main contribution was the undisclosed wrongdoings of inflations made by the Federal Reserve during the stock market boom. In the August 1990 issue of The Quarterly Journal of Economics, Christine D. Romerwrites that, "The negative effect of stock market variability is more than strong enough to account for the entire decline in real consumer spending on durables that occurred in late 1929 and 1930" (Romer 1990, 597). The Federal Reserve was first created to prevent banks from panic and going into debt. Instead it made many unfortunate mistakes that caused the stock market to explode and go haywire. According to author Roger W. Garrison of The Depression Revisited, “The first thing [the Fed] did was to inflate the money supply by about 60% during the 1920's. If the Fed had been a little more careful in expanding the money supply, it might have prevented the artificial Stock market boom and subsequent crash” (Garrison 1999, 595). There were also many indications that the economy in early 1929 was starting to recover, yet the Federal Reserve spiked interest rates during this time which reversed any progress made. Co-authors Christina D. and David H. Romer of Reducing Inflation: Motivation and Strategy also wrote that, “The Federal Reserve began expressing concern in early 1928 and at that time began a policy of monetary restriction in an effort to stem the stock market advance" (C. Romer & D. Romer 1997, 167). The monetary expansion of 1927 is considered by many economists to be a key factor in setting off the U.S. stock market advances of the late 1920s. The existence of the Fed insisted that banks wait and follow the acts of the central bank, instead of using solutions they had previously devised from the crises of the 19^th century. So ironically, in trying to fix this problem with the stock market bang, they actually did more damage. Author of Wartime Prosperity, Robert Higgs, believes that “A better grounded interpretation is that during [WWll,] the economy was a huge arsenal in which the well-being of consumers deteriorated. After the war, genuine prosperity returned for the first time since 1929” (Higgs 1992, 12). Although many errors were made throughout this epoch, the entire blame cannot be placed on the Federal Reserve because there were a multiple of other factors that played a part.

Inflation is one of the chief concerns in today’s economical crisis, just as seen in the past. When the Fed tried to stabilize market prices by increasing the money supply, its value went down, and over time became merely worthless. This type of inflation where excess money is being printed by the government whenever needed is called seignorage and it continues to be a major issue for this case globally. Journalist David J. Lynch noted in a USA Today article on July 18, 2008, “As if slow growth and a financial crisis weren't enough to worry about, the International Monetary Fund says inflation has emerged as a third major threat to the global economy” (Lynch 2008). On The Website Abelard, it defines Inflation as “When all prices rise at the same time. This happens when the quantity of money issued by the government is increased, or when the amount of goods produced and traded recedes” (Abelard Online Articles). In other words recession is inflationary. Today’s modern governments have a great tendency to manipulate the quantity of money in the economy in order to ensure their own selfish and guilty objectives. Understanding inflation’s role in the economy is very critical because it affects all aspects of the economy, from consumer spending, business investment and employment rates, to government programs, tax policies, and interest rates. All of these factors are essential for improvement of government transactions and a thriving economy. David Wessel, deputy Washington bureau chief of the Wall Street Journal, appeared live on NPR Morning Edition News May 26, 2006 and asserted, “In the Middle of May [2006], the government reported the consumer price index for April and it showed a little more inflation than the markets had been expecting and that seems to have really freaked them out” (Wessel 2006).When consumers become fearful of inflation increases, they stop spending due to the rising prices. As citizens of America we have witnessed this inflation when the price of oil just a few months back reached nearly $5/ gallon. This is just one example of increased prices directly related to the massive printing of superfluous money and corrupt government spending. Rory Singh, writer of How Inflation Affects the Economy and Your Life explains that “During a recession, business starts to dry up & employers find themselves cutting down on staff” (Singh 2008). Unemployment rates have surged strikingly high which has caused bigger problems for the economy as well; more people are relying on federal aid. The government has also taken repossession of numerous houses and cars over the last few months. Inflation has been spiraling out of control for years and now finally has caused the economy to hit an all-time low that is going to be extremely difficult to overcome.

By now we have all begun to see many signs that our economy is gradually disintegrating and needs a fast recovery. The Fed has already tried raising income taxes and lowering interest rates to balance out high inflation but that simply has not worked because higher taxes means less income and less consumer spending which counteracts the purpose. There is another approach that seems rather ‘too good to be true’ but is actually the complete contrast of the monetary policy and that is the fiscal policy. Columnists Giancarlo Corsetti and Gernot Müller of VOX: Center for Economic Policy Researchemphasize that, “Moreover, as our economies have become more open, international coordination of fiscal expansions is increasingly necessary to achieve the maximum impact without worsening trade balances” (Corsetti & Müller 2008). Instead of interest rates and money supply, the two main focuses of the fiscal policy are government spending and taxation. Altering these two mechanisms can positively modify the levels of demand and economic activity, as well as salvage resource allocation and income distribution. There are three stances in this type of policy. The first is neutral where the government spending equals the amount of tax revenue received from citizens. The expansionary stance is where government spending is greater than tax revenue but can produce a budget deficit. The third is a contractionary stance where government spending is reduced through increased tax revenue and can reverse a budget deficit. According to Canadian Prime Minister Stephen Harper of National Post, "Monetary policy alone will not be sufficient to take the global economy through this crisis. There will have to be fiscal action, and there will have to be additional fiscal action” (Harper 2008). The fiscal policy is the only way for the government to impose a certain amount of taxation in accordance with the salary and income of the citizens. Requiring higher taxes from wealthier civilians and lowering taxes for poorer people would create a happy medium in the economy. At first it may take a few adjustments for this system to work, but I truly believe a fiscal stimulus is vital to restore global economic growth.

The fiscal policy alone is frankly not going to be enough to override this serious case of financial collapse. This policy certainly presents a better outlook than the monetary policy in the sense that will help balance out taxation, but government spending is still going to need a great extent of renovation to reach a secure standpoint. IMF Managing Director of Reuters News, Dominique Strauss-Kahn, understands, “Taxpayers would get a far larger bang for their buck if public spending programs were aligned across borders” (Lynch 2003). The government’s spending is unrestrained and unjust. There needs to be more organization throughout the government’s treasury and better management of the national debt. Brian M. Riedl of The Heritage Foundation claims that, “Taxing Americans less also means that Washington must learn to spend less. Lawmakers courageously restrained spending in the mid-1990s but have since abandoned fiscal responsibility in favor of bloated budgets that assume there is no problem bigger government cannot solve” (Riedl 2009). This is exactly the wrong approach needed for this situation. Yes, the government has a multitude of expenses, but there are also billions of dollars being spent on discretionary campaigns. Many government programs harm the economy because they sacrifice families and businessmen in order to integrate authority and wealth. In 2003, reducing wasteful spending was more important than ever. Defense, homeland security, and expensive benefits created a stringent budget for the federal government while a high tax burden weighed down the economy. Now six years later, the debt has nearly doubled and is still getting worse. On January 7, 2009, Gwen Ifill of PBS: the Online News Hour declared, “The projected deficit represents about 8 percent of the economy's gross domestic product, the highest since World War II, once adjusted for inflation” (Ifill 2009). It is shameful to see nothing being done about our nation’s debt except to leave it for future leaders to deal with when a setback plan should have begun years ago. Another reporter from PBS: the Online News Hour, David Walker, believes “We also need to put a process in place so that we can start making tough choices on budget controls, Social Security, health care, and tax reform, so we can avoid a much bigger crisis down the road” (Walker 2009). Future spending cuts tend to raise current consumption and investment, along with steadying long-term interest rates. We have seen millions here and billions there being spent daily by the government and no real handling on the $1.2 trillion national debt. There is no better time than now to crack down on the government expenditure and start considering the future of the world’s economy.

Now in the second year of this rollercoaster of an economic streak, the public has definitely opened their eyes a little wider and seen the true sneaky side of the federal government. Our government has absolutely expanded over the past years and although you would think it would emerge stronger and more stable, this development has caused greater problems and more complex matters. The major concerns I have is for the well-being of America and its future. The rising taxes and prices of consumer goods, as well as massive amounts of unemployment, is damaging the economy and creating a deeper hole to be dug out of. We have faced and conquered this dilemma in the past so I know it can be done with much time, effort, and preparation. The real resolution is to revise government systems and build barriers for spending and inflation. We must encourage citizens to help each other in every way they can these days. As one author of The Way We Will Be 50 Years from Today, James Canton says, “Innovation is the key driver of the global economy and peace and security. Innovation goes hand in hand with democracy” (Canton 2008, 194). We are a nation under God, almighty and powerful, with liberty and justice for all; it is about time we start living up to our standards

Abelard. The Great Government Swindle and How It Works, 2000: The Mechanics of Inflation. Abelard Online Articles, http://www.abelard.org/inflation.php (Accessed January 12, 2009.)

Bull, Alister. 2008. Leaders Pledge Fiscal Boost to Save World Economy. Reuters News. (November 15), http://www.reuters.com/article/vcCandidateFeed2/idUSTRE4AF05F20081116 (Accessed January 12, 2008.)

Canton, James, 2008. "Some Words From Dr. Future." The Way We Will Be Fifty Years From Today: 60 of the World’s Greatest Minds

Share Their Vision of the Next Half Century, edited by Mike Wallace and Bill Adler. (Nashville: Thomas Nelson Publishers), 194.

Corsetti, Giancarlo and Gernot Müller. 2008. The Effectiveness of Fiscal Policy Depends on the

Financing and Monetary Policy Mix. VOX: Center for Economic Policy Research (November 12), http://www.voxeu.org/index.php?q=node/255 (Accessed January 12, 2009).

Garrison, Roger W. 1999. The Great Depression Revisited. Review of The Great Depression: an International
Disaster of Perverse Economic Policies by Thomas E. Hall and J. David Ferguson.

The Independent Review: Volume 3, No. 4, Spring Edition.

Higgs, Robert. 1992. Wartime Prosperity? A Reassessment of the U.S. Economy in the 1940s. The Journal of

Economic History: 12-14.

Ifill, Gwen and David Walker. 2009. Federal Budget Deficit Projected to Skyrocket in 2009. PBS: The

Online News Hour. PBS News (Aired January 7), http://www.pbs.org/newshour/bb/business/jan-june09/deficit_01-07.html (Accessed January 12, 2009).

Lynch, David J. 2008. Inflation threatens global economy, IMF warns. USA Today News (July 18),
http://www.usatoday.com/money/economy/2008-07-17-global-economy-imf_N.htm (Accessed January 12, 2009).

Riedl, Brian M. 2003. Ten Guidelines for Reducing Wasteful Government Spending. The Heritage

Foundation (February 12), http://www.heritage.org/Research/budget/bg1622.cfm (Accessed January 12, 2009).

Romer, Christina D. 1997. The Great Crash and the Onset of the Great Depression. Quarterly Journal

of Economics 105: 597-624.

Romer, Christina D. and David H. Romer. 1997. "Disinflation and the NAIRU." Reducing Inflation: Motivation and Strategy. (Chicago:

University of Chicago Press for NBER), 167.

Singh, Rory. 2008. How Inflation Affects the Economy & Your Life. Ezine News-and-

Society/Economics (October 28), http://ezinearticles.com/?How-Inflation-Affects-the-Economy-and-Your-Life&id=1624598 (Accessed January 12, 2009).

Thorpe, Jacqueline. 2008. Canada will try to avoid deficit: Harper. National Post (November 15,),

http://www.financialpost.com/most_popular/story.html?id=964050 (Accessed January 12, 2009).

Wessel, David. 2006. How Is Inflation Affecting the U.S. Economy? Morning Edition. NPR News (Aired

May 26), http://www.npr.org/templates/story/story.php?storyId=5433442 (Accessed January 12, 2009).

(APA) Economical Solution by Katrina Beck

In order to conduct any type of solution for this problem, we must first take a look at the causes of our greatest downfall in history, The Great Depression of 1929. A combination of many different factors led to this atrocity, but the main contribution was the undisclosed wrongdoings of inflations made by the Federal Reserve during the stock market boom. In the August 1990 issue of The Quarterly Journal of Economics, Christine D. Romer (1990)writes that, "The negative effect of stock market variability is more than strong enough to account for the entire decline in real consumer spending on durables that occurred in late 1929 and 1930" (Romer, 1990). The Federal Reserve was first created to prevent banks from panic and going into debt. Instead it made many unfortunate mistakes that caused the stock market to explode and go haywire. According to author Roger W. Garrison (1999) of The Depression Revisited, “The first thing [the Fed] did was to inflate the money supply by about 60% during the 1920's. If the Fed had been a little more careful in expanding the money supply, it might have prevented the artificial Stock market boom and subsequent crash” (Garrison, 1999). There were also many indications that the economy in early 1929 was starting to recover, yet the Federal Reserve spiked interest rates during this time which reversed any progress made. Co-authors Christina D. and David H. Romer (1997) of Reducing Inflation: Motivation and Strategy also wrote that, “The Federal Reserve began expressing concern in early 1928 and at that time began a policy of monetary restriction in an effort to stem the stock market advance" (C. Romer & D. Romer, 1997). The monetary expansion of 1927 is considered by many economists to be a key factor in setting off the U.S. stock market advances of the late 1920s. The existence of the Fed insisted that banks wait and follow the acts of the central bank, instead of using solutions they had previously devised from the crises of the 19^th century. So ironically, in trying to fix this problem with the stock market bang, they actually did more damage. Author of Wartime Prosperity, Robert Higgs (1992), believes that “A better grounded interpretation is that during [WWll,] the economy was a huge arsenal in which the well-being of consumers deteriorated. After the war, genuine prosperity returned for the first time since 1929” (Higgs, 1992). Although many errors were made throughout this epoch, the entire blame cannot be placed on the Federal Reserve because there were a multiple of other factors that played a part.

Inflation is one of the chief concerns in today’s economical crisis, just as seen in the past. When the Fed tried to stabilize market prices by increasing the money supply, its value went down, and over time became merely worthless. This type of inflation where excess money is being printed by the government whenever needed is called seignorage and it continues to be a major issue for this case globally. Journalist David J. Lynch noted in a USA Today article on July 18, 2008, “As if slow growth and a financial crisis weren't enough to worry about, the International Monetary Fund says inflation has emerged as a third major threat to the global economy” (Lynch, 2008). On The Website Abelard (2008), it defines Inflation as “When all prices rise at the same time. This happens when the quantity of money issued by the government is increased, or when the amount of goods produced and traded recedes” (Abelard, 2008). In other words recession is inflationary. Today’s modern governments have a great tendency to manipulate the quantity of money in the economy in order to ensure their own selfish and guilty objectives. Understanding inflation’s role in the economy is very critical because it affects all aspects of the economy, from consumer spending, business investment and employment rates, to government programs, tax policies, and interest rates. All of these factors are essential for improvement of government transactions and a thriving economy. David Wessel, deputy Washington bureau chief of the Wall Street Journal, appeared live on NPR Morning Edition News May 26, 2006 and asserted, “In the Middle of May [2006], the government reported the consumer price index for April and it showed a little more inflation than the markets had been expecting and that seems to have really freaked them out” (Wessel, 2006).When consumers become fearful of inflation increases, they stop spending due to the rising prices. As citizens of America we have witnessed this inflation when the price of oil just a few months back reached nearly $5/ gallon. This is just one example of increased prices directly related to the massive printing of superfluous money and corrupt government spending. Rory Singh (2008), writer of How Inflation Affects the Economy and Your Life explains that “During a recession, business starts to dry up & employers find themselves cutting down on staff” (Singh, 2008). Unemployment rates have surged strikingly high which has caused bigger problems for the economy as well; more people are relying on federal aid. The government has also taken repossession of numerous houses and cars over the last few months. Inflation has been spiraling out of control for years and now finally has caused the economy to hit an all-time low that is going to be extremely difficult to overcome.

By now we have all begun to see many signs that our economy is gradually disintegrating and needs a fast recovery. The Fed has already tried raising income taxes and lowering interest rates to balance out high inflation but that simply has not worked because higher taxes means less income and less consumer spending which counteracts the purpose. There is another approach that seems rather ‘too good to be true’ but is actually the complete contrast of the monetary policy and that is the fiscal policy. Columnists Giancarlo Corsetti and Gernot Müller (2008) of VOX: Center for Economic Policy Researchemphasize that, “Moreover, as our economies have become more open, international coordination of fiscal expansions is increasingly necessary to achieve the maximum impact without worsening trade balances” (Corsetti & Müller, 2008). Instead of interest rates and money supply, the two main focuses of the fiscal policy are government spending and taxation. Altering these two mechanisms can positively modify the levels of demand and economic activity, as well as salvage resource allocation and income distribution. There are three stances in this type of policy. The first is neutral where the government spending equals the amount of tax revenue received from citizens. The expansionary stance is where government spending is greater than tax revenue but can produce a budget deficit. The third is a contractionary stance where government spending is reduced through increased tax revenue and can reverse a budget deficit. According to Canadian Prime Minister Stephen Harper (2008) of National Post, "Monetary policy alone will not be sufficient to take the global economy through this crisis. There will have to be fiscal action, and there will have to be additional fiscal action” (Harper, 2008). The fiscal policy is the only way for the government to impose a certain amount of taxation in accordance with the salary and income of the citizens. Requiring higher taxes from wealthier civilians and lowering taxes for poorer people would create a happy medium in the economy. At first it may take a few adjustments for this system to work, but I truly believe a fiscal stimulus is vital to restore global economic growth.

The fiscal policy alone is frankly not going to be enough to override this serious case of financial collapse. This policy certainly presents a better outlook than the monetary policy in the sense that will help balance out taxation, but government spending is still going to need a great extent of renovation to reach a secure standpoint. IMF Managing Director of Reuters News, Dominique Strauss-Kahn (2003), understands, “Taxpayers would get a far larger bang for their buck if public spending programs were aligned across borders” (Lynch, 2003). The government’s spending is unrestrained and unjust. There needs to be more organization throughout the government’s treasury and better management of the national debt. Brian M. Riedl (2009) of The Heritage Foundation claims that, “Taxing Americans less also means that Washington must learn to spend less. Lawmakers courageously restrained spending in the mid-1990s but have since abandoned fiscal responsibility in favor of bloated budgets that assume there is no problem bigger government cannot solve” (Riedl, 2009). This is exactly the wrong approach needed for this situation. Yes, the government has a multitude of expenses, but there are also billions of dollars being spent on discretionary campaigns. Many government programs harm the economy because they sacrifice families and businessmen in order to integrate authority and wealth. In 2003, reducing wasteful spending was more important than ever. Defense, homeland security, and expensive benefits created a stringent budget for the federal government while a high tax burden weighed down the economy. Now six years later, the debt has nearly doubled and is still getting worse. On January 7, 2009, Gwen Ifill of PBS: the Online News Hour declared, “The projected deficit represents about 8 percent of the economy's gross domestic product, the highest since World War II, once adjusted for inflation” (Ifill, 2009). It is shameful to see nothing being done about our nation’s debt except to leave it for future leaders to deal with when a setback plan should have begun years ago. Another reporter from PBS: the Online News Hour, David Walker, believes “We also need to put a process in place so that we can start making tough choices on budget controls, Social Security, health care, and tax reform, so we can avoid a much bigger crisis down the road” (Walker, 2009). Future spending cuts tend to raise current consumption and investment, along with steadying long-term interest rates. We have seen millions here and billions there being spent daily by the government and no real handling on the $1.2 trillion national debt. There is no better time than now to crack down on the government expenditure and start considering the future of the world’s economy.

Now in the second year of this rollercoaster of an economic streak, the public has definitely opened their eyes a little wider and seen the true sneaky side of the federal government. Our government has absolutely expanded over the past years and although you would think it would emerge stronger and more stable, this development has caused greater problems and more complex matters. The major concerns I have is for the well-being of America and its future. The rising taxes and prices of consumer goods, as well as massive amounts of unemployment, is damaging the economy and creating a deeper hole to be dug out of. We have faced and conquered this dilemma in the past so I know it can be done with much time, effort, and preparation. The real resolution is to revise government systems and build barriers for spending and inflation. We must encourage citizens to help each other in every way they can these days. As one author of The Way We Will Be 50 Years from Today, James Canton (2008) says, “Innovation is the key driver of the global economy and peace and security. Innovation goes hand in hand with democracy” (Canton, 2008). We are a nation under God, almighty and powerful, with liberty and justice for all; it is about time we start living up to our standards.

Abelard. (2008).The great government swindle and how it works: The mechanics of inflation. Abelard online articles. January 12, 2009, from http://www.abelard.org/inflation.php.

Bull, A. (2008). Leaders pledge fiscal boost to save world economy. Reuters News. January 12, 2009, from
http://www.reuters.com/article/vcCandidateFeed2/idUSTRE4AF05F20081116.

Canton, J and Wallace, M. (2008). Some words from Dr. future. In B. Adler (Ed.), The way we will be fifty years from today: 60 of the world’s greatest minds share their vision of the next half century (194-196). Nashville: Thomas Nelson Publishers.

Corsetti, G. and Gernot, M. (2008). The effectiveness of fiscal policy depends on the

financing and monetary policy mix. VOX: Center for Economic Policy Research. January 12, 2009, from http://www.voxeu.org/index.php?q=node/255.

Garrison, R. W. (Spring 1999). The great depression revisited, a review of the book The great depression: an international disaster of perverse economic policies. The Independent Review: Volume 3, No. 4.
Retrieved from http://www.auburn.edu/~garriro/r26hall.htm.

Higgs, R. (1992). Wartime prosperity? A reassessment of the U.S. economy in the 1940s. The Journal of

Economic History, 12-14.

Ifill, G. and David, W. (January 7, 2009). Federal budget deficit projected to skyrocket in 2009. PBS: The

online news hour. New York: MacNeil/Lehrer Productions.

Lynch, D. J. (2008). Inflation threatens global economy, IMF warns. USA Today News.

January 12, 2009, from http://www.usatoday.com/money/economy/2008-07-17-global-economy-imf_N.htm.

Riedl, B. M. (2003). Ten guidelines for reducing wasteful government spending. The Heritage Foundation. January 12, 2009, from
http://www.heritage.org/Research/budget/bg1622.cfm.

Romer, C. D. (1990). The great crash and the onset of the great depression. Quarterly Journal of Economics 105, 597-624.

Romer, C. D. and Romer, D. H. (1997). Disinflation and the NAIRU. In C.D. Romer and D. H. Romer (Eds.), Reducing inflation: motivation and strategy (167-174). Chicago: University of Chicago Press for NBER.

Singh, R. (2008). How inflation affects the economy and your life. Ezine News-and-

Society/Economics. January 12, 2009, from http://ezinearticles.com/?How-Inflation-Affects-the-Economy-and-Your-Life&id=1624598.

Thorpe, J. (2008). Canada will try to avoid deficit: Harper. National Post. January 12, 2009, from

http://www.financialpost.com/most_popular/story.html?id=964050.

Wessel, D. (2006). How is inflation affecting the U.S. economy? Morning Edition: NPR News. January 12, 2009.. from

http://www.npr.org/templates/story/story.php?storyId=5433442.

(MLA) Economical Solution by Katrina Beck

In order to conduct any type of solution for this problem, we must first take a look at the causes of our greatest downfall in history, The Great Depression of 1929. A combination of many different factors led to this atrocity, but the main contribution was the undisclosed wrongdoings of inflations made by the Federal Reserve during the stock market boom. In the August 1990 issue of The Quarterly Journal of Economics, Christine D. Romerwrites that, "The negative effect of stock market variability is more than strong enough to account for the entire decline in real consumer spending on durables that occurred in late 1929 and 1930" (597). The Federal Reserve was first created to prevent banks from panic and going into debt. Instead it made many unfortunate mistakes that caused the stock market to explode and go haywire. According to author Roger W. Garrison of The Depression Revisited, “The first thing [the Fed] did was to inflate the money supply by about 60% during the 1920's. If the Fed had been a little more careful in expanding the money supply, it might have prevented the artificial Stock market boom and subsequent crash” (595). There were also many indications that the economy in early 1929 was starting to recover, yet the Federal Reserve spiked interest rates during this time which reversed any progress made. Co-authors Christina D. and David H. Romer of Reducing Inflation: Motivation and Strategy also wrote that, “The Federal Reserve began expressing concern in early 1928 and at that time began a policy of monetary restriction in an effort to stem the stock market advance" (167). The monetary expansion of 1927 is considered by many economists to be a key factor in setting off the U.S. stock market advances of the late 1920s. The existence of the Fed insisted that banks wait and follow the acts of the central bank, instead of using solutions they had previously devised from the crises of the 19^th century. So ironically, in trying to fix this problem with the stock market bang, they actually did more damage. Author of Wartime Prosperity, Robert Higgs, believes that “A better grounded interpretation is that during [WWll,] the economy was a huge arsenal in which the well-being of consumers deteriorated. After the war, genuine prosperity returned for the first time since 1929” (12). Although many errors were made throughout this epoch, the entire blame cannot be placed on the Federal Reserve because there were a multiple of other factors that played a part.

Inflation is one of the chief concerns in today’s economical crisis, just as seen in the past. When the Fed tried to stabilize market prices by increasing the money supply, its value went down, and over time became merely worthless. This type of inflation where excess money is being printed by the government whenever needed is called seignorage and it continues to be a major issue for this case globally. Journalist David J. Lynch noted in a USA Today article on July 18, 2008, “As if slow growth and a financial crisis weren't enough to worry about, the International Monetary Fund says inflation has emerged as a third major threat to the global economy” (Par. 1). On The Website Abelard, it defines Inflation as “When all prices rise at the same time. This happens when the quantity of money issued by the government is increased, or when the amount of goods produced and traded recedes” (Par. ). In other words recession is inflationary. Today’s modern governments have a great tendency to manipulate the quantity of money in the economy in order to ensure their own selfish and guilty objectives. Understanding inflation’s role in the economy is very critical because it affects all aspects of the economy, from consumer spending, business investment and employment rates, to government programs, tax policies, and interest rates. All of these factors are essential for improvement of government transactions and a thriving economy. David Wessel, deputy Washington bureau chief of the Wall Street Journal, appeared live on NPR Morning Edition News May 26, 2006 and asserted, “In the Middle of May [2006], the government reported the consumer price index for April and it showed a little more inflation than the markets had been expecting and that seems to have really freaked them out” (Wessel, live radio).When consumers become fearful of inflation increases, they stop spending due to the rising prices. As citizens of America we have witnessed this inflation when the price of oil just a few months back reached nearly $5/ gallon. This is just one example of increased prices directly related to the massive printing of superfluous money and corrupt government spending. Rory Singh, writer of How Inflation Affects the Economy and Your Life explains that “During a recession, business starts to dry up & employers find themselves cutting down on staff” (Par. 2). Unemployment rates have surged strikingly high which has caused bigger problems for the economy as well; more people are relying on federal aid. The government has also taken repossession of numerous houses and cars over the last few months. Inflation has been spiraling out of control for years and now finally has caused the economy to hit an all-time low that is going to be extremely difficult to overcome.

By now we have all begun to see many signs that our economy is gradually disintegrating and needs a fast recovery. The Fed has already tried raising income taxes and lowering interest rates to balance out high inflation but that simply has not worked because higher taxes means less income and less consumer spending which counteracts the purpose. There is another approach that seems rather ‘too good to be true’ but is actually the complete contrast of the monetary policy and that is the fiscal policy. Columnists Giancarlo Corsetti and Gernot Müller of VOX: Center for Economic Policy Researchemphasize that, “Moreover, as our economies have become more open, international coordination of fiscal expansions is increasingly necessary to achieve the maximum impact without worsening trade balances” (Par. 3). Instead of interest rates and money supply, the two main focuses of the fiscal policy are government spending and taxation. Altering these two mechanisms can positively modify the levels of demand and economic activity, as well as salvage resource allocation and income distribution. There are three stances in this type of policy. The first is neutral where the government spending equals the amount of tax revenue received from citizens. The expansionary stance is where government spending is greater than tax revenue but can produce a budget deficit. The third is a contractionary stance where government spending is reduced through increased tax revenue and can reverse a budget deficit. According to Canadian Prime Minister Stephen Harper of National Post, "Monetary policy alone will not be sufficient to take the global economy through this crisis. There will have to be fiscal action, and there will have to be additional fiscal action” (Par. 12). The fiscal policy is the only way for the government to impose a certain amount of taxation in accordance with the salary and income of the citizens. Requiring higher taxes from wealthier civilians and lowering taxes for poorer people would create a happy medium in the economy. At first it may take a few adjustments for this system to work, but I truly believe a fiscal stimulus is vital to restore global economic growth.

The fiscal policy alone is frankly not going to be enough to override this serious case of financial collapse. This policy certainly presents a better outlook than the monetary policy in the sense that will help balance out taxation, but government spending is still going to need a great extent of renovation to reach a secure standpoint. IMF Managing Director of Reuters News, Dominique Strauss-Kahn, understands, “Taxpayers would get a far larger bang for their buck if public spending programs were aligned across borders” (Par. 13). The government’s spending is unrestrained and unjust. There needs to be more organization throughout the government’s treasury and better management of the national debt. Brian M. Riedl of The Heritage Foundation claims that, “Taxing Americans less also means that Washington must learn to spend less. Lawmakers courageously restrained spending in the mid-1990s but have since abandoned fiscal responsibility in favor of bloated budgets that assume there is no problem bigger government cannot solve” (Par. 2). This is exactly the wrong approach needed for this situation. Yes, the government has a multitude of expenses, but there are also billions of dollars being spent on discretionary campaigns. Many government programs harm the economy because they sacrifice families and businessmen in order to integrate authority and wealth. In 2003, reducing wasteful spending was more important than ever. Defense, homeland security, and expensive benefits created a stringent budget for the federal government while a high tax burden weighed down the economy. Now six years later, the debt has nearly doubled and is still getting worse. On January 7, 2009, Gwen Ifill of PBS: the Online News Hour declared, “The projected deficit represents about 8 percent of the economy's gross domestic product, the highest since World War II, once adjusted for inflation” (Par. 7). It is shameful to see nothing being done about our nation’s debt except to leave it for future leaders to deal with when a setback plan should have begun years ago. Another reporter from PBS: the Online News Hour, David Walker, believes “We also need to put a process in place so that we can start making tough choices on budget controls, Social Security, health care, and tax reform, so we can avoid a much bigger crisis down the road” (Par. 25). Future spending cuts tend to raise current consumption and investment, along with steadying long-term interest rates. We have seen millions here and billions there being spent daily by the government and no real handling on the $1.2 trillion national debt. There is no better time than now to crack down on the government expenditure and start considering the future of the world’s economy.

Now in the second year of this rollercoaster of an economic streak, the public has definitely opened their eyes a little wider and seen the true sneaky side of the federal government. Our government has absolutely expanded over the past years and although you would think it would emerge stronger and more stable, this development has caused greater problems and more complex matters. The major concerns I have is for the well-being of America and its future. The rising taxes and prices of consumer goods, as well as massive amounts of unemployment, is damaging the economy and creating a deeper hole to be dug out of. We have faced and conquered this dilemma in the past so I know it can be done with much time, effort, and preparation. The real resolution is to revise government systems and build barriers for spending and inflation. We must encourage citizens to help each other in every way they can these days. As one author of The Way We Will Be 50 Years from Today, James Canton says, “Innovation is the key driver of the global economy and peace and security. Innovation goes hand in hand with democracy” (194). We are a nation under God, almighty and powerful, with liberty and justice for all; it is about time we start living up to our standards.

Abelard. “The Great Government Swindle and How It Works: The Mechanics of Inflation.” Abelard Online Articles. 2008. January 12 2009. <http://www.abelard.org/inflation.php>.

Bull, Alister. “Leaders Pledge Fiscal Boost to Save World Economy.” Reuters News. November 15 2008. January 12 2009.
<http://www.reuters.com/article/vcCandidateFeed2/idUSTRE4AF05F20081116>.

Canton, James. The Way We Will Be Fifty Years From Today: 60 of the World’s Greatest Minds Share Their Vision of the Next Half Century by Mike Wallace. Nashville:Thomas Nelson Publishers, 2008.

Corsetti, Giancarlo and Gernot Müller. “The Effectiveness of Fiscal Policy Depends on the

Financing and Monetary Policy Mix.” VOX: Center for Economic Policy Research (November 12, 2008), http://www.voxeu.org/index.php?q=node/255 (Accessed January 12, 2009).

Garrison, Roger W. “The Great Depression Revisited, A review of The Great Depression: an International Disaster of Perverse Economic Policies." Thomas E. Hall and J. David Ferguson. The Independent Review: Volume 3, No. 4, 1999: 595.

Higgs, Robert. "Wartime Prosperity? A Reassessment of the U.S. Economy in the 1940s." The Journal of

Economic History. 1992: 12-14.

Ifill, Gwen and David Walker. “Federal Budget Deficit Projected to Skyrocket in 2009.” PBS: The

Online News Hour. PBS News. January 7 2009. January 12, 2009. <http://www.pbs.org/newshour/bb/business/jan-june09/deficit_01-07.html>.

Lynch, David J. "Inflation threatens global economy, IMF warns." USA Today News, July 18

2008. January 12 2009. <http://www.usatoday.com/money/economy/2008-07-17-global-economy-imf_N.htm>.

Riedl, Brian M. “Ten Guidelines for Reducing Wasteful Government Spending.” The Heritage Foundation February 12 2003. January 12 2009. <http://www.heritage.org/Research/budget/bg1622.cfm>.

Romer, Christina D. "The Great Crash and the Onset of the Great Depression.” Quarterly Journal of Economics 105. 1990: 597-624.

Romer, Christina D. and David H. Romer. Reducing Inflation: Motivation and Strategy. Chicago: University of Chicago Press for NBER. 1997.

Singh, Rory. "How Inflation Affects the Economy & Your Life." Ezine News-and-

Society/Economics 28 October 2008. 12 January 2009. <http://ezinearticles.com/?How-Inflation-Affects-the-Economy-and-Your-Life&id=1624598>.

Thorpe, Jacqueline. “Canada will try to avoid deficit: Harper.” National Post. 15 November 2008. 12 January 2009

<http://www.financialpost.com/most_popular/story.html?id=964050>.

Wessel, David. “How Is Inflation Affecting the U.S. Economy?” Morning Edition: NPR News. 26 May 2006. 12 January 2009.

<http://www.npr.org/templates/story/story.php?storyId=5433442>.

(Chicago 1) Economical Solution by Katrina Beck

In order to conduct any type of solution for this problem, we must first take a look at the causes of our greatest downfall in history, The Great Depression of 1929. A combination of many different factors led to this atrocity, but the main contribution was the undisclosed wrongdoings of inflations made by the Federal Reserve during the stock market boom. In the August 1990 issue of The Quarterly Journal of Economics, Christine D. Romerwrites that, "The negative effect of stock market variability is more than strong enough to account for the entire decline in real consumer spending on durables that occurred in late 1929 and 1930."¹ The Federal Reserve was first created to prevent banks from panic and going into debt. Instead it made many unfortunate mistakes that caused the stock market to explode and go haywire. According to author Roger W. Garrison of The Depression Revisited, “The first thing [the Fed] did was to inflate the money supply by about 60% during the 1920's. If the Fed had been a little more careful in expanding the money supply, it might have prevented the artificial Stock market boom and subsequent crash.”² There were also many indications that the economy in early 1929 was starting to recover, yet the Federal Reserve spiked interest rates during this time which reversed any progress made. Co-authors Christina D. and David H. Romer of Reducing Inflation: Motivation and Strategy also wrote that, “The Federal Reserve began expressing concern in early 1928 and at that time began a policy of monetary restriction in an effort to stem the stock market advance. “ ³ The monetary expansion of 1927 is considered by many economists to be a key factor in setting off the U.S. stock market advances of the late 1920s. The existence of the Fed insisted that banks wait and follow the acts of the central bank, instead of using solutions they had previously devised from the crises of the 19^th century. So ironically, in trying to fix this problem with the stock market bang, they actually did more damage. Author of Wartime Prosperity, Robert Higgs, believes that “A better grounded interpretation is that during [WWll,] the economy was a huge arsenal in which the well-being of consumers deteriorated. After the war, genuine prosperity returned for the first time since 1929.”⁴ Although many errors were made throughout this epoch, the entire blame cannot be placed on the Federal Reserve because there were a multiple of other factors that played a part.

Inflation is one of the chief concerns in today’s economical crisis, just as seen in the past. When the Fed tried to stabilize market prices by increasing the money supply, its value went down, and over time became merely worthless. This type of inflation where excess money is being printed by the government whenever needed is called seignorage and it continues to be a major issue for this case globally. Journalist David J. Lynch noted in a USA Today article on July 18, 2008, “As if slow growth and a financial crisis weren't enough to worry about, the International Monetary Fund says inflation has emerged as a third major threat to the global economy.” ⁵On The Website Abelard, it defines Inflation as “When all prices rise at the same time. This happens when the quantity of money issued by the government is increased, or when the amount of goods produced and traded recedes.” ⁶ In other words recession is inflationary. Today’s modern governments have a great tendency to manipulate the quantity of money in the economy in order to ensure their own selfish and guilty objectives. Understanding inflation’s role in the economy is very critical because it affects all aspects of the economy, from consumer spending, business investment and employment rates, to government programs, tax policies, and interest rates. All of these factors are essential for improvement of government transactions and a thriving economy. David Wessel, deputy Washington bureau chief of the Wall Street Journal, appeared live on NPR Morning Edition News May 26, 2006 and asserted, “In the Middle of May [2006], the government reported the consumer price index for April and it showed a little more inflation than the markets had been expecting and that seems to have really freaked them out.” ⁷When consumers become fearful of inflation increases, they stop spending due to the rising prices. As citizens of America we have witnessed this inflation when the price of oil just a few months back reached nearly $5/ gallon. This is just one example of increased prices directly related to the massive printing of superfluous money and corrupt government spending. Rory Singh, writer of How Inflation Affects the Economy and Your Life explains that “During a recession, business starts to dry up & employers find themselves cutting down on staff.” ⁸ Unemployment rates have surged strikingly high which has caused bigger problems for the economy as well; more people are relying on federal aid. The government has also taken repossession of numerous houses and cars over the last few months. Inflation has been spiraling out of control for years and now finally has caused the economy to hit an all-time low that is going to be extremely difficult to overcome.

By now we have all begun to see many signs that our economy is gradually disintegrating and needs a fast recovery. The Fed has already tried raising income taxes and lowering interest rates to balance out high inflation but that simply has not worked because higher taxes means less income and less consumer spending which counteracts the purpose. There is another approach that seems rather ‘too good to be true’ but is actually the complete contrast of the monetary policy and that is the fiscal policy. Columnists Giancarlo Corsetti and Gernot Müller of VOX: Center for Economic Policy Researchemphasize that, “Moreover, as our economies have become more open, international coordination of fiscal expansions is increasingly necessary to achieve the maximum impact without worsening trade balances.” ⁹Instead of interest rates and money supply, the two main focuses of the fiscal policy are government spending and taxation. Altering these two mechanisms can positively modify the levels of demand and economic activity, as well as salvage resource allocation and income distribution. There are three stances in this type of policy. The first is neutral where the government spending equals the amount of tax revenue received from citizens. The expansionary stance is where government spending is greater than tax revenue but can produce a budget deficit. The third is a contractionary stance where government spending is reduced through increased tax revenue and can reverse a budget deficit. According to Canadian Prime Minister Stephen Harper of National Post, "Monetary policy alone will not be sufficient to take the global economy through this crisis. There will have to be fiscal action, and there will have to be additional fiscal action.” ¹⁰ The fiscal policy is the only way for the government to impose a certain amount of taxation in accordance with the salary and income of the citizens. Requiring higher taxes from wealthier civilians and lowering taxes for poorer people would create a happy medium in the economy. At first it may take a few adjustments for this system to work, but I truly believe a fiscal stimulus is vital to restore global economic growth.

The fiscal policy alone is frankly not going to be enough to override this serious case of financial collapse. This policy certainly presents a better outlook than the monetary policy in the sense that will help balance out taxation, but government spending is still going to need a great extent of renovation to reach a secure standpoint. IMF Managing Director of Reuters News, Dominique Strauss-Kahn, understands, “Taxpayers would get a far larger bang for their buck if public spending programs were aligned across borders.” ¹¹ The government’s spending is unrestrained and unjust. There needs to be more organization throughout the government’s treasury and better management of the national debt. Brian M. Riedl of The Heritage Foundation claims that, “Taxing Americans less also means that Washington must learn to spend less. Lawmakers courageously restrained spending in the mid-1990s but have since abandoned fiscal responsibility in favor of bloated budgets that assume there is no problem bigger government cannot solve.” ¹² This is exactly the wrong approach needed for this situation. Yes, the government has a multitude of expenses, but there are also billions of dollars being spent on discretionary campaigns. Many government programs harm the economy because they sacrifice families and businessmen in order to integrate authority and wealth. In 2003, reducing wasteful spending was more important than ever. Defense, homeland security, and expensive benefits created a stringent budget for the federal government while a high tax burden weighed down the economy. Now six years later, the debt has nearly doubled and is still getting worse. On January 7, 2009, Gwen Ifill of PBS: the Online News Hour declared, “The projected deficit represents about 8 percent of the economy's gross domestic product, the highest since World War II, once adjusted for inflation.” ¹³ It is shameful to see nothing being done about our nation’s debt except to leave it for future leaders to deal with when a setback plan should have begun years ago. Another reporter from PBS: the Online News Hour, David Walker, believes “We also need to put a process in place so that we can start making tough choices on budget controls, Social Security, health care, and tax reform, so we can avoid a much bigger crisis down the road.”¹³ Future spending cuts tend to raise current consumption and investment, along with steadying long-term interest rates. We have seen millions here and billions there being spent daily by the government and no real handling on the $1.2 trillion national debt. There is no better time than now to crack down on the government expenditure and start considering the future of the world’s economy.

Now in the second year of this rollercoaster of an economic streak, the public has definitely opened their eyes a little wider and seen the true sneaky side of the federal government. Our government has absolutely expanded over the past years and although one would think it would emerge stronger and more stable, this development has caused greater problems and more complex matters. The major concerns I have is for the well-being of America and its future. The rising taxes and prices of consumer goods, as well as massive amounts of unemployment, is damaging the economy and creating a deeper hole to be dug out of. We have faced and conquered this dilemma in the past so I know it can be done with much time, effort, and preparation. The real resolution is to revise government systems and build barriers for spending and inflation. We must encourage citizens to help each other in every way they can these days. As one author of The Way We Will Be 50 Years from Today, James Canton says, “Innovation is the key driver of the global economy and peace and security. Innovation goes hand in hand with democracy.” ¹⁴We are a nation under God, almighty and powerful, with liberty and justice for all; it is about time we start living up to our standards.

Footnotes

1. (Print Magazine Article)

Christina D. Romer, "The Great Crash and the Onset of the Great Depression,” Quarterly Journal of
Economics 105 (1990): 597.

2. (Book Review)

Roger W. Garrison, “The Great Depression Revisited,” review of The Great Depression: an International Disaster of Perverse Economic Policies, by Thomas E. Hall and J. David Ferguson, The Independent Review: Volume 3, No. 4, Spring 1999, 595.

3. (Book)

Christina D. Romer and David H. Romer, Reducing Inflation: Motivation and Strategy, (Chicago: University of
Chicago Press for NBER, 1997), 167.

4. (Professional Journal)

Robert Higgs, "Wartime Prosperity? A Reassessment of the U.S. Economy in the 1940s," The Journal of Economic
History, March 1, 1992, 12.

5. (Online News Article)

David J. Lynch, "Inflation threatens global economy, IMF warns," USA Today News, (2008),
http://www.usatoday.com/money/economy/2008-07-17-global-economy-imf_N.htm, (Accessed January 12, 2009).

6. (Website)

Abelard Online Articles, “The Great Government Swindle and How It Works, September 11, 2000: The Mechanics of Inflation,” Abelard, http://www.abelard.org/inflation.php, (Accessed January 12, 2009).

7. (Radio Broadcast)

David Wessel, “How Is Inflation Affecting the U.S. Economy?” Morning Edition, NPR News, May 26, 2006,
http://www.npr.org/templates/story/story.php?storyId=5433442, (Accessed January 12, 2009).

8.(Online Article)

Rory Singh, "How Inflation Affects the Economy & Your Life," Ezine News-and-Society/Economics, (2008),
http://ezinearticles.com/?How-Inflation-Affects-the-Economy-and-Your-Life&id=1624598,(Accessed January 12, 2009).

9. (Online Article)

Giancarlo Corsetti and Gernot Müller “The Effectiveness of Fiscal Policy Depends on the Financing and Monetary Policy Mix,” VOX: Center for Economic Policy Research, (2008),
http://www.voxeu.org/index.php?q=node/2554, (Accessed January 12, 2009).

10. (Online Article)

Jacqueline Thorpe, “Canada will try to avoid deficit: Harper,” National Post, (2008), http://www.financialpost.com/most_popular/story.html?id=964050, (Accessed January 12, 2009).

11. (Online Article)

Alister Bull, “Leaders Pledge Fiscal Boost to Save World Economy,” Reuters News, (2008), http://www.reuters.com/article/vcCandidateFeed2/idUSTRE4AF05F20081116, (Accessed January 12, 2009).

12. (Online Article)

Brian M. Riedl, “Ten Guidelines for Reducing Wasteful Government Spending,” The Heritage Foundation, (2003), http://www.heritage.org/Research/budget/bg1622.cfm, (Accessed January 12, 2009).

13. (Live TV Stream Video)

Gwen Ifill and David Walker. “Federal Budget Deficit Projected to Skyrocket in 2009” PBS: The Online News Hour, PBS News, Aired January 7, 2009, http://www.pbs.org/newshour/bb/business/jan-june09/deficit_01-07.html (Accessed January 12, 2009).

14. (Book)

James Canton, The Way We Will Be Fifty Years From Today: 60 of the World’s Greatest Minds Share Their Vision of the Next Half Century by Mike Wallace, (Nashville: Thomas Nelson Publishers, 2008), 194.

Bibliography

Abelard. “The Great Government Swindle and How It Works, 2000: The Mechanics of

Inflation.” Abelard Online Articles, http://www.abelard.org/inflation.php (Accessed January 12,

2009).

Bull, Alister. “Leaders Pledge Fiscal Boost to Save World Economy.” Reuters News. 15 November 2008. 12 January 2009. <http://www.reuters.com/article/vcCandidateFeed2/idUSTRE4AF05F20081116

Canton, James. "Some Words From Dr. Future." The Way We Will Be Fifty Years From Today: 60 of the World’s Greatest Minds

Share Their Vision of the Next Half Century by Mike Wallace. Nashville: Thomas Nelson Publishers, 2008.

Corsetti, Giancarlo and Gernot Müller. “The Effectiveness of Fiscal Policy Depends on the

Financing and Monetary Policy Mix.” VOX: Center for Economic Policy Research (November 12, 2008), http://www.voxeu.org/index.php?q=node/255 (Accessed January 12, 2009).

Garrison, Roger W. “The Great Depression Revisited.” Review of The Great Depression: an International
Disaster of Perverse Economic Policies, by Thomas E. Hall and J. David Ferguson.

The Independent Review: Volume 3, No. 4, Spring 1999.

Higgs, Robert. "Wartime Prosperity? A Reassessment of the U.S. Economy in the 1940s." The Journal of

Economic History, (1992): 12-14.

Ifill, Gwen and David Walker. “Federal Budget Deficit Projected to Skyrocket in 2009.” PBS: The

Online News Hour. PBS News (Aired January 7, 2009), http://www.pbs.org/newshour/bb/business/jan-june09/deficit_01-07.html (Accessed January 12, 2009).

Lynch, David J. "Inflation threatens global economy, IMF warns." USA Today News, (July 18,

2008), http://www.usatoday.com/money/economy/2008-07-17-global-economy-imf_N.htm (Accessed January 12, 2009).

Riedl, Brian M. “Ten Guidelines for Reducing Wasteful Government Spending.” The Heritage

Foundation (February 12, 2003), http://www.heritage.org/Research/budget/bg1622.cfm (Accessed January 12, 2009).

Romer, Christina D. "The Great Crash and the Onset of the Great Depression.” Quarterly Journal

of Economics 105 (1990): 597-624.

Romer, Christina D. and David H. Romer. Reducing Inflation: Motivation and Strategy. Chicago:

University of Chicago Press for NBER, 1997.

Singh, Rory. "How Inflation Affects the Economy & Your Life." Ezine News-and-

Society/Economics (October 28, 2008), http://ezinearticles.com/?How-Inflation-Affects-the-Economy-and-Your-Life&id=1624598 (Accessed January 12, 2009).

Thorpe, Jacqueline. “Canada will try to avoid deficit: Harper.” National Post (November 15, 2008),

http://www.financialpost.com/most_popular/story.html?id=964050 (Accessed January 12, 2009).

Wessel, David. “How Is Inflation Affecting the U.S. Economy?” Morning Edition. NPR News (Aired

May 26, 2006), http://www.npr.org/templates/story/story.php?storyId=5433442 (Accessed January 12, 2009).

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