American deficit by kristina leskova

Last economical analyses predict that American deficit will reach the amount of unbelievable nine trillion dollars. This number is really huge and it is predicted for the next decade. This is more than when we put together all American deficits since its founding. And this is not the only problem. The unemployment rate is still increasing and analysts await that it will reach ten percent. Budget analysts estimate that American economy will decrease by 2,5 to 2,8 percent even though everybody speaks about recovery. How to decrease the deficit? The most used instruments are spending cuts or tax increases. But American economy is not able to use them. There is risk that holder! s of American debt would demand increase of interest rate and this would be quickly seen in pocketbooks of American consumers. Anyway Obama said that he is satisfied with the improvement in the economy and he would like to nominate Republican Ben Bernanke as a chairman of the Federal Reserve also for the second term. President Obama promised to decrease the deficit in half in 2013 and this would be a tough task. This recession was worse than it was predicted during last fall and winter. Republicans complicate the present situation. They announced that spending, borrowing and debt are out of control. The Congress has to be very careful. If he does not reduce the deficit it could cause increase of interest rate and this would damage the economy. But if the Congress begins too soon it could stop the recovery of economy. The coming ten years will be difficult but crucial for the recovery.

related story (sgx15226): http://news.yahoo.com/s/ap/20090826/ap_on_go_pr_wh/us_obama_...

by kristina leskova for PocketNews (http://pocketnews.tv)

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