American Economy Goes Through Temporary Periods of Term Paper

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American economy goes through temporary periods of expansions and subsequent periods of decline. In many instances, the results of this over optimism or severe pessimism are due primarily to human emotion. It is human nature to become worrisome or risk averse during periods of extreme pessimism. Likewise, it is human nature to become over excited about future prospects during periods of extreme optimism. At some point however, both the extreme optimism and extreme pessimism must correct itself. It has done so for the past 200 years. Below is a chart depicting U.S. GDP figures during the past 80 years. As is depicted from the chart GDP, or the goods and services bought sold and produced in the United States has increases every decade without fail. If history is any indication of the future this trend will continue (1).

Now, as many are well aware of, our nation is currently in the midst of a mild recover. Yet, the goods and services bought sold in produced in the country continue to increase. In essence, we are in period of extreme pessimism as I mentioned earlier. This period of extreme pessimism as indicated by history will correct itself at some point in the future

How does GDP, optimism and pessimism affect ACS and its budgetary circumstances? All of what I mentioned above has a profound impact on not only ACS's budget but the budget of many state and local initiatives around the nation. In regards to ACS, the reason behind the budget cuts is a direct result of over pessimism on the part of executives and politicians.

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Individuals are first not working. Therefore, income generated in terms of tax revenue is not as abundant as it was prior to the recession. People as a result of this pessimism are reluctant to spend on goods and services. 70% of our national GDP is comprised of consumer spending (2). As a result of our lack of consumer spending, GDP has only risen 2.5% this year (3). This deviates substantially from the historical 3% increase. Without the initial demand for their products, companies as a natural recourse must now lay off workers. This move further complicates issues as the unemployment rate increases. As a result, the ACS program must be cut due to inadequate funding on the state and local level.

Now, the worst option in regards to the economy that should be taken by government is a direst halt of spending. In periods such as the one we are currently encountering, the government must spend in an effort to heighten consumer confidence and subsequently restart the economy (4). Once consumer fears have abated, the government should then relinquish its role as a primary spender and allow the economy to propel growth. Our nation is currently spending large sums of money in an effort to once again put the economy on a path to prosperity. This adjustment is expensive as trillions of dollars are being spent on the state and local level.

Why then, is the ACS budget being cut as spending is increasing? Well first, areas within the ACS program that are not necessary to its successful operation are being cut. The mission of.....

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