FED VS Recession
The economy of the United States of America is the largest in the world. In 2000, the U.S. had a Gross Domestic Product (GDP) of 9,318.5 billion dollars. (Real Gross Domestic Product, 2001) The United States has an economy that is market driven but government regulated. Because the economy is market driven, it tends to have a cyclical nature. The market contracts, which causes a decrease in GDP, and it expands which causes the GDP to rise. This cycle is constantly in motion. Before the Great Depression, the government did not intervene with the economy. It did nothing to boost the economy during a slump or slow it down if it grew too fast. The economic thinkers of the time believed that the economy would self-adjust if anything was to happen. Once the economy began its downward spiral in 1929, it did not self-adjust itself. It was during this time, that Lord Keynes suggested that government intervene. This became the basis for modern day economics. Today, the government plays on active in the economy. Its primary goal is to act as a moderator for when it grows and slows down. It also acts to promote economic growth while keeping inflation low. One of the major factors that helps to achieve this balance is the Fed
Board of Governors of the Federal Reserve System" (2001). (Cooper, 2001, 29) Therefore although the economy is not in a recession, yet it is definitely slowing down and possibly headed towards a recession. Then in 1981, he became the Chairman of the National Commission on Social Security, a position he held for three years. "Traditionally, the Chairman of the Board of Governors is elected Chairman and the President of the Federal Reserve Bank of New York is elected Vice President. government, the public, financial institutions, and foreign official institutions. If this happens, then the price of money will lower and the unemployment rate will most likely rise. Although the price of money is low, they would rather pay off outstanding debt rather than incur more. Greenspan was re-appointed in February of 1992 for a full fourteen-year term. What exactly is a recession though? The most common definition of a recession is two consecutive quarters of decline. President Bush is currently trying to get his tax cut passed through Congress.
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