Deal with the Offense, implement an effective policy, be a world changer by Ludy

Deal with the Offense, implement an effective policy, be a world changer by Ludy - October 2017 Scholarship Essay

If I could meet any President, I would meet former president George W. Bush Jr. I would also like to assume that in meeting him I would also be afforded the opportunity to be given an adequate amount of time to converse and submit a wide array of suggestions on how to address the financial crises that began in 2006 (although popularly known as the 2008 financial crisis). Some of the policies like the Federal Reserve adding about $24 billion in liquidity to the banking system, and Congress approving a $700 billion to bailout the powerhouse banks had severe repercussion on the masses. The level of involvement from the Federal Reserve and the Government exposed a new dimension of power to operate in, and facilitate an easily navigation and exploitative system in order to dissolve the mischievous ways of government officials which is motivated by their desire to extract high amounts of profits. The stimulus plan of Bush also contributed to the economic deficiency of the economy, revisited by the Obama Administration that fell short in gearing the economy into a successful period of expansion. I believe that a meeting with President Bush is paramount in that, after the 2008 recession the economy was left in a vulnerable state, and many Americans lost the trust and confidence they initially had in the government elected officials, Presidents along with economist and advisors. Due to the recession, one problem that surfaced to economist was the limited disclosure of information and untampered financial reports. Thus, economist can not even give an accurate account of the state or progression of our economy nor forewarn banks of the high risk and the damage that comes with awarding small amounts of credits to middle-class to low income citizens without an active monitor on said decision. As a result, economist began to coin the non-committal statements such as “it depends” to respond to reporters/journalist seeking out their expertise.
One of of the suggestions I would submit to President Bush would ultimately persuade him that raising the target rate of inflation to be higher than 2 percent is essential and extremely beneficial to our economy.During the savings and crisis, the Federal Reserve dropped the inflation target from 5 percent to 2 percent in order to be able to control and maneuver the economy to their desired. By having the inflation target at 2 percent, the Feds have “ample leverage” which could be lower real interest rates at their disposal. However, the inflation target was implemented over a decade ago, and as the economy changes there should be a demand for the Federal Reserve to reassess this target seems warranted. A higher inflation target will give the Federal Reserve more credibility in being equipped to deploy the necessary monetary policy in the presence of any given crisis.
The importance of the Federal Reserve raising the 2 percent inflation target will account for a shorter recession. The main objective of the Federal Reserve should be to analyze the given date observed from the economy to clearly assess the amount of pressure the economy can take. To create this strong economy, a conventional interest rate policy must be first created and then implemented. As the developed economies changes over a given time, like the US, the economy may experience difficulties in generating faster growth in aggregate demand. The Federal Reserve should not only be guided by the level of pressure the economy could take, but also accurately observing the changes that occur within the economy at a current, clearly meaning to increase the long-run inflation target. Author Josh Bivens argues that during the 2008 recession, if the inflation target was above 2 percent during the 2008 recession, inflation-adjusted interest rates to be lowered further, but because it will be easier for households to climb out from under overhanging debt. Lower inflation rates shifts the relationship of power to those who are already in power (the lenders) from being in the hands of the masses (the borrowers). For starters, recession is caused when aggregate demand (i.e households) is too low, then effecting the labor market(i.e available jobs). Hence why, the transfer of power puts a heavy restrain on the economic growth as debt levels causes “low-inflation traps”
The Federal Reserve have adopted inflation rates that are two low to sustain the economic growth of the world. These rates were derived during a time where the given target provided an opportunity for the said entity to uplift the current state of the economy and maneuver it into a strong economy. This target was chosen in the 1990s during a critical time in the economy, however, over a decade later with the current state of our economy a change in the inflation target seems warranted.
Given the opportunity to address said issues with President Bush, I believe the economy could have experienced a period of upward mobility. During the period of expansion, the mass population could have reaped the benefits of effective policies put in place for the embetterment, enrichment, and improvement of their cost of living, as well as their level of enjoyment within the workforce. Also, rectifying ineffective policy would repair the relationship of the government and the American citizens which should be the ultimate goal of all elected government offices. Therefore, meeting former President Bush, would have been an opportunity of a lifetime.