U.S. Consumer Price Index Increases by Most Since 2009 - Book Report/Review Example

The standard of living for the people in the US is bound to suffer as the CPI recently witnessed a major percentage rise. The companies are not in a position to pass on the respective increase in prices to their customers as the demand will be affected. The rate of unemployment being high, people do not have much money in their hands and therefore they would demand less if there is a rise in the prices. The food prices will also take the steeply rising curve and the drought can be held to be the reason. The travel and Tourism sector will feel the heat as the fuel prices rise and traveling will become more expensive. The steps of the Fed are directed towards sustained improvements in the labor market and that is why the interest rates have kept at a much lower level.

Romney Bashing Bernanke Rejects Mankiw’s Monetary Views

Romney shunned the views of one of his advisors who supported the views of the Federal Chief. Some eminent economists confirmed that the arguments put forward by Romney are closer to that of Taylor than it is to Mankiw. According to Romney, the monetary stimulus cannot ensue the real growth in the market for goods and services. Therefore monetary stimulus suffers from the incapability to raise wages and create employment opportunities in the economy. One statement of Romney engages arguments is where he states that government can spend towards achieving the full employment level but it cannot borrow the way towards this achievement. The budget sanctioned each year for military expenditure will suffice to achieve the full employment level. The government will not be able to fulfill its desires if the outlays are funded from borrowing rather than the revenues from taxes. Printing new money will not serve the purpose either as the economy can soon be under the grasp of inflation. A substantial proportion of the tax revenues are wasted and used to serve the compound interest charges. This is the structural problem of the credit boom economy and steps are awaited to deal with it (Zumbrun, 2012).