Economic trends and policy makers
The recent employment report in America indicates that job development is very slow. This signals an economy to be regressive to a maintainable rate of growth rather than a more radical one. This is wrong because the economy is slowing significantly (Wolfers, 2016). There are reasons why employment is growing slow such as election-related unrest, fear of the induced interest rates that tend to be higher and global concern about the economy. In order to make the economy more sustainable and stable policy makers have to make and implement some policies.
To begin with, the federal reserves have maintained a low-interest rate as a standard rule of cutting down the rates to stimulate the economy to grow. Typically this translates to fiscal policies. This does not come without its challenges such as new administration in place. This is a challenge because the priorities of a new president are unknown. This is a downturn of the fiscal policy which is seen to unlikely slow down the economy for nearly a year. Political climates may compromise the economy. This may result in a slow growth of the economy. This is because interest rates tend to increase when an economy is surrounded by an unstable political situation. Lenders increase the rates which in turn discourage many (Wolfers, 2016).
Quantitative easing is a policy embarked by Federal Reserve in case the economy falters. This policy does not require a major shift though members may protest. The reserve is viewed as a political organization but not in the way that it helps the egalitarians or the republicans. It aims at preserving its own legacy through independence. Through the audited reports the reserve help individuals in making decisions (Wolfers, 2016). These decisions are subjected to the congressional review to prevent the economy from sinking. The officials are faced with difficult decisions to make. This is because they could follow the channel of expansionary monetary policy .This strategy can set an economy on a recovering path in the short term. This means that the assembly can damage the efficiency of this policy in the long run if all aspects are not put into consideration. All the economic circumstances should be sufficiently dire to help tip a balance towards the monetary stimulus (Wolfers, 2016).
These policies take some time to be agreed on. The debates of the policies can continue for sometimes and in unlikely situations, they do not yield a response sooner. This further slows down the economy and even worse the policy of market expectation of the economy inaction becomes more vulnerable. This destroys the investors’ confidence in various economic opportunities which make them encounter recessionary forces (Wolfers, 2016). When there are disappointed due to the expectation of inaction the small slight slowdowns may influence its growth into something bigger. This results into a speedy sell-off that might challenge confidence.
In cases where the economy is sound, it is not guaranteed that it will persist in the long run. This means that there should be policies put in place to oversee the economic trends prevailing at any given time and make sure that any defect is corrected rather than waiting when the economy is in crisis. Good economic management is a policy that will not only focus on the success of today but also the failures and any challenges expected to rise in the future (Wolfers, 2016). By the use of this metric, it is possible to see the danger of underperforming. When the economy is healthy it is always important to be prepared for any financial troubles that may arise.
When the economy is performing below the expectation of the policy makers the economy is greatly threatened. It is true to say that the policy makers are faced with a heavy task ahead of them. They have to make policies and implement them through various strategies (Wolfers, 2016). The process of making these policies is not a simple process but rather a process full of debates from the members. The process is also slow as there are many stages of making a policy and ensuring that it is effective. The members’ layout the possible consequences that will arise with any agreement made. This makes the whole process slower portraying an image of unpreparedness of the policy makers (Wolfers, 2016).
With a new administration taking change there should be a smooth change of office and powers involved not to affect the economy in any given way. To make the policy makers more credible at their work and increase the stability of the economy they should come up with strategies that will continue even with the new administration despite the priorities of the president (Wolfers, 2016). In the case of political instability there should be measure but in place to make sure that the economy is not affected. This will involve creating awareness of the importance of safeguarding the economy. To make it a success policy makers have to address the issue of unemployment. This will help in creating job opportunities hence a better report on job growth and in return a more stable economy.
Reference
Wolfers Justin (2016). If The Economy Is Sinking ,Policy Makers Are Far From Prepared. Retrieved from http://www.nytimes.com/2016/06/05/upshot/if-the-economy-is-slowing- policy-makers-are-far-from-prepared.html
