International Economics Paper
University of Phoenix
This paper prepared for ECO/372 facilitated by
The Federal Reserve system is the main banking system within the United States. Established by Congress, its primary objectives are to seek full employment for US citizens, ensure price stability, supervise banks via regulation, provide financial services to banks, the US government, and foreign official institutions, and review and stabilize long-term interest rates. A seven person Board of Governors, also known as a federal agency, administers the Federal Reserve. Currently the Board Chair is Janet Yellen, the first woman to ...view middle of the document...
One particular reform under President Obama is the Affordable Care Act, which cuts medical costs, offers free preventative services and cheaper prescription drugs, and combats health care fraud. The total savings in recovered fraud is over $19.2 billion dollars, thus expanding the economy (The White House, 2015). Many of Obama's investments are currently supporting American businesses in an attempt to create a significant increase of job percentage. In 2011, Obama signed trade agreements with Korea, Columbia, and Panama- a key element to the President's balanced trade agenda to open markets for US exporters and to reinvigorate our workforce (The White House, 2015).
Though the President's monetary policy seeks to achieve a financial stability not seen since the Clinton Administration, many public opinion polls and recent election results credit a weak GDP, unprecedented deficit spending, and a disproportionate amount of joblessness amongst blacks, Hispanics, and youth to Obama's failed policies, or rather his use of the wrong policies (US News, 2015). In March of 2012, Obama signed executive order 13603 regarding “National Defense Resources Preparedness”. This outlined a plan to regulate “all commodities and products that are capable of being ingested by either human beings or animals, all forms of energy, all forms of civil transportation, all usable water from all sources, all health resources – drugs, biological products, medical devices, materials, facilities, health supplies, services, and equipment, and all forced labor” (US News, 2015). This reform echoes that of the axis power's totalitarian economic reforms during World War II (Kaldor, 2007). Though an extreme comparison, it serves to illustrate that the White House is not immune to economic policy decisions that can and will contract the economy.
Congress and Economic Policymakers
Just as important as the President, Congress acts as a key player in economic policy reform, specifically domestic reform. Some important economic growth opportunities within Congress' jurisdiction are monetary policy reform, tax and budget reform, and regulatory reform. One opportunity for Congress to expand the economy is to increase the congressional budget window. The Congressional Budget Office (CBO) projects spending and revenue effects for the first 10 years of any legislative proposal. This will not account for long-term effects and can ultimately result in laws that purposely hide a “spending explosion” beyond the 10 years (Bakst, 2015). Obama's Affordable Care Act was one example of this type of law, as the first 10 years's worth of CBO estimates failed to capture the full range of spending required by the law. Should the CBO window extend to 20 or 30 years, it would make more visible the spending and revenue effects of policy change.
Congress has delegated responsibility for monetary policy to the Fed but still regulates the Fed's adherence to its statutory mandate of “maximum...