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Jacob What Is Your Opinion About The Federal Reserve

463 Words2 Pages

Me: Hi Jacob, have you seen the news recently? They have been talking a lot about government spending. Jacob: Yeah, I saw that. I believe that government spending should be increased in order to help our economy grow. Me: Are you kidding? Why would we increase spending, if it can raise the prices of many products? Jacob: If we raise government spending, then it can give people services that they need like EBT cards, welfare checks, and disability checks. Me: It can do that, but it will increase the national debt if we begin to spend more. Jacob: I believe that it is the least of our problems if it increases labor productivity and enables long-term economic growth. Me: It won't help the private sector out though, which is the one of the …show more content…

Me: What is your opinion about the Federal Reserve? Jacob: I believe that the Federal Reserve should raise the rates of the Federal Reserve. Me: I don't agree with you. I believe that the rates should stay the same because inflation might increase if the Federal Reserve increases its rates. Jacob: You have a point there, but you also have to see that increasing the rates of the Federal Reserve will make credit more available to small businesses. Me: I agree with you, but our government has an inflation line that we cannot pass, and if the rates are increased, we might pass the inflation line of 2%, which would disbalance the economy. Jacob: But you also need to see the point that it can boost job growth by making automation in many companies more expensive. Me: That is a great point, and I agree with you. However, if we increase the rates, it can lead to inflation, and in case of a recession, the Central Bank will have no way to protect itself since its currency is worth less than before. Jacob: I see where you're going, but by raising the interest rates, we will increase the national debt, and we will put pressure on Congress to restrain the government spending, which is something that you want to

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