United States, Net Borrower
Performing a detailed scrutiny when an international debt crisis strikes, would reveal that struggling countries are guilty of pursuing a self defeating strategy in their build up to foreign debt. Most of the problems that besiege the modern economies are not in any way a swarm of locusts in the form of a plaque, sent by an angered supreme being. This is instead a product of stubbornness of those in authority and the incompetence demonstrated in government interventions, which never confronted the reality of the situation.
The United States net borrowing suggests a complex economic situation partly contributed by the need to meet trade deficits, settle fiscal deficits and pursue global-oriented programs for the benefit of the world population. The status of a debtor nation emerges when a country becomes persistently dependant on foreign investments because of the trade deficit and spending program (Whetts, 2010). The historical path adopted by the United States, feed to the continued condition of a net borrower, where strategies pursued to stabilize the international debt translate to growing debts.
[...] The Top 5 Foreign Holders of U.S. Public Debt. Retrieved December from http://wallstcheatsheet.com/stocks/the-top-5-foreign-holdersof-u-s-public-debt.html/?a=viewall Stilwell, V. (2013, September 25). Household Net Worth in U.S. Increases by $ 1.3 Trillion . Retrieved December from http://www.bloomberg.com/news/2013-0925/household-net-worth-in-u-s-increases-by-1-3-trillion.html Thoma, M. (2012, March o5). Did the Stimulus Package Work? Retrieved December from http://www.economonitor.com/blog/2012/03/did-the-stimulus-package-work/ UNITED STATES AS A NET BORROWER 11 Whetts, B. (2010). [...]
[...] However, owing to the unsustainability of the existing imbalance in the world economy, the federal government need to limit its borrowing as it adjusts to fiscal policies and domestic savings. This will prevent a sharp fall in foreign funding from toppling the economy beyond self-recovery. UNITED STATES AS A NET BORROWER Bibliography Baker, P. (2009, February 9). At Town Hall Rally, Obama Pushes Stimulus Plan. Retrieved December from http://www.nytimes.com/2009/02/10/us/politics/10obamaweb.html?_r=0 Faulkner, R. K., Shell, S. M., & Schneider, T. E. (2009). [...]
[...] delays local projects in their economies, it will lead to sharp fall in lending with severe consequences to the economy. Conclusion The status of the United States indebtedness, suggest a country dependent on foreign lenders to finance its deficit in spending. Although the path to the complex status reflects, several factors contributing to the huge national debt originate from actions embraced in past administrations. Predominantly, financing numerous wars dating from the American Revolutionary war to the military action in Iraq and Afghanistan, assumes the largest share of facts feeding to the soaring debt. [...]
[...] indebtedness (Baker, 2009). Although the government-initiated programs are to blame, U.S. citizens have their contribution in the national debt. Primarily, spread of consumerism in a belief that high levels of consumer spending benefit the economy. Most citizens are dis-savers and the gaps between their incomes and consumption rate leads to borrowing. For instance, the U.S. consumers developed a culture of consuming more than their income would permit, as such was thought a stimulator to UNITED STATES AS A NET BORROWER the economic growth. [...]
[...] The historical path adopted by the United States, feed to the continued condition of a net borrower, where strategies pursued to stabilize the international debt translate to growing debts. History of the United States National Debt Since the late 1700s, the country has incurred more debts to finance war activities contrasted to foreign trading. Firstly, the pioneers of the American treasury financed the American Revolutionary war by issuing loan certificates. This facilitated borrowing from the Netherlands and France, which accumulated to $43 million by 1783. [...]
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