The United States has had a significant increase in its economy in recent years, thanks to the efforts of the Obama administration. Unemployment is at the lowest it’s been since the start of 2008 at 4.6 percent (Bureau of Labor Statistics 1), the GDP has continued to rise, and on the surface the country seems to be perfectly stable, economically speaking. However, if one were to look at and focus on the long term plans that the US is using, then the entire US economy is on what is called a “bubble.” A perfect example of a bubble is the stock market crash of 2008, where homes were being sold in very risky payout situations, and many homes were defaulted upon. This practice continued for some time before the market was able to take notice and
…show more content…
“The trade balance is the difference between exports (domestically produced goods and services sold to other countries) and imports (goods and services purchased from other countries). Exporting goods and services produces income for a country; therefore, exports add to the trade balance, which in turn contributes to total Gross Domestic Product (GDP). Alternatively, when a country imports goods and services, it sends some of its income abroad to pay for them; thus imports detract from the trade balance and from GDP” (Dr. Econ). Trade deficit occurs when a country imports more than it exports, which is exactly what the US is doing right now. The US is importing more goods than ever, including products from food to clothing. Many such products come from trade with China, which is where the majority of the national US debt comes from. The big problem of being in such a trade deficit is that although foreign governments are currently fine to lend the US with large sums of money, at some point in the future they could start to call for collection. This leaves the US as a country under the total control of foreign governments, economically speaking. If at any point those countries become dissatisfied with lending out money to the US, it could prove very problematic for the functioning of the US. In terms of economic theory, a trade deficit is …show more content…
The average American probably doesn’t know that the last major US tax reform was actually thirty years ago in 1986. In the span of time between then and now, minor changes and reforms have piled up to create one giant mess of a tax code. “American taxes have grown in complexity, with the U.S. tax code now containing nearly 4 million words that sanction over $1 trillion annually in lost revenue through various tax breaks and loopholes. Meanwhile, the U.S. has fallen behind other countries in competitiveness with the highest statutory corporate tax rate among OECD countries. Yet, revenue is not keeping up with spending, and the gap is expected to grow wider in the coming years” (Debt and Taxes: The Need for Fundamental Tax Reform). Spending through the tax code is a near nightmare, where billions upon billions of dollars are lost due to the increasingly complicated process. The fairness of the current tax system should certainly be under questioning as well. As it stands, many of the loopholes and tax breaks that are hidden within the tax code benefit the wealthy, who can hire a team of lawyers to find places within the code to benefit themselves. What needs to be done is large tax reform, that simplifies this complex situation down to one that promotes fairness and helps to reduce future deficits. If it is done correctly, tax reform can significantly increase the revenue of the US while at the same
“The trade balance is the difference between exports (domestically produced goods and services sold to other countries) and imports (goods and services purchased from other countries). Exporting goods and services produces income for a country; therefore, exports add to the trade balance, which in turn contributes to total Gross Domestic Product (GDP). Alternatively, when a country imports goods and services, it sends some of its income abroad to pay for them; thus imports detract from the trade balance and from GDP” (Dr. Econ). Trade deficit occurs when a country imports more than it exports, which is exactly what the US is doing right now. The US is importing more goods than ever, including products from food to clothing. Many such products come from trade with China, which is where the majority of the national US debt comes from. The big problem of being in such a trade deficit is that although foreign governments are currently fine to lend the US with large sums of money, at some point in the future they could start to call for collection. This leaves the US as a country under the total control of foreign governments, economically speaking. If at any point those countries become dissatisfied with lending out money to the US, it could prove very problematic for the functioning of the US. In terms of economic theory, a trade deficit is …show more content…
The average American probably doesn’t know that the last major US tax reform was actually thirty years ago in 1986. In the span of time between then and now, minor changes and reforms have piled up to create one giant mess of a tax code. “American taxes have grown in complexity, with the U.S. tax code now containing nearly 4 million words that sanction over $1 trillion annually in lost revenue through various tax breaks and loopholes. Meanwhile, the U.S. has fallen behind other countries in competitiveness with the highest statutory corporate tax rate among OECD countries. Yet, revenue is not keeping up with spending, and the gap is expected to grow wider in the coming years” (Debt and Taxes: The Need for Fundamental Tax Reform). Spending through the tax code is a near nightmare, where billions upon billions of dollars are lost due to the increasingly complicated process. The fairness of the current tax system should certainly be under questioning as well. As it stands, many of the loopholes and tax breaks that are hidden within the tax code benefit the wealthy, who can hire a team of lawyers to find places within the code to benefit themselves. What needs to be done is large tax reform, that simplifies this complex situation down to one that promotes fairness and helps to reduce future deficits. If it is done correctly, tax reform can significantly increase the revenue of the US while at the same