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of the Federal Reserve, 6 % of State and Local Government, domestic and private investors 32% and the major portion of was the international investor who offered 46 %. These are the four most important places where U.S was able to borrow money from. The international investors like BP, DaimlerChrysler, ING group which are located in different countries like U.K and Netherlands provided the U.S with a major portion of the credit. Once this money is borrowed, both parties have to come into an agreement on how the interest will be paid. Once the U.S has borrowed money, they will pay the interest rates depending on each countries agreement with the U.S government. They can also exchange privileges. This means that that the U.S government can give an investor the opportunity to be able to switch from one mutual fund to another with the family without paying sales charges.
Credit rating is a method used to evaluate the credit worthiness if a debtor and this can be a business or a government. This is done by a credit rating agency like Moody’s, Fitch Ratings and Standard & Poor. . The credit rating of a government like U.S is a financial indicator to potential investors of securities like bonds. The Credit rating agency Standard and Poor (S&P) downgraded its credit rating of the U.S federal government from AAA (outstanding) to AA+( excellent) by the third quarter of the year 2011. This seems not to be good news to the U.S as international implication of public deficit will lead to higher current accounts deficit, it will also increase the risk of capital flight this affecting the image of the country. This will make international investors to shy away from investing in this country.
The current account is a component of the balance of payment while the other being capital account. The current account balance measures the nature of a country’s foreign trade. The capital account determines how international capital flows and investment are recorded in the capital
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The United States of America is an economic powerhouse, and is the largest economy in the world. According to the CIA World Factbook (2011) it is the case that the U.S. economy has an official GDP $14.62 trillion in 2010. However, the economy of the United States is experiencing a number of challenges.
The 2010 Health care reform has created and changed existing health care policies to improve the health care delivery. The health care system in the United States is a mixture of private and public insurance programs. The need for a reform is highlighted by the fact that nearly one fifth of the population of United States lack health insurance.
ficits provide the economy with a small boost, but if allowed to continue on its path of projected growth, deficits will eventually result in the lower standards of living caused by a sustained stagnation of the economy. Citizens will also be deprived of various government
United States Trade Deficit Name Course Name Instructor Date United States Trade Deficit Introduction In the recent years, United States has been faced with an unprecedented amount of borrowing. It has also managed to support its overwhelming account deficit without experiencing significant challenges in foreign investors holding its assets.
The economic history of the United States has its roots in the marginally successful colonial economies that progressed to a small, independent farming economy; and over the course of those years, the United States grew into a large industrialized economy, making up approximately a fifth of the world economy.
Strong US Dollar that makes U.S.-made products more expensive to foreign buyers also causes the continued trade deficit. Despite its current trade deficit, American economy is viewed as healthier than other world economies that have been mired by worldwide slump.
Macroeconomic instability has also detect that banking sector has been on a constant systemic risk with an increase in the nonperforming loans and short-term interest rates have caused devaluation in foreign currency borrowing and local currency lending. Macroeconomic policies have tried hard to target inflation by adopting monetary policy strategy.
Debt ceiling does not directly mange the national deficit. Debt ceiling crisis of 2011 was significantly debated topic in the US Congress. The matter was an important subject of substantial political debate in the
The loans have enabled the U.S.A to sustain its current account deficits. According to Summers (2004), the United States had a fall in its rate of savings and a rise in the rate of domestic investment. Nations with high saving
This situation greatly affected the citizens of the American households being the most affected. Other sectors that were affected by the unemployment owing to the global financial crisis were a decline in stock market and the housing
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