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Essay / Research Paper Abstract
This 3 page paper examines an article on economics. The article concerns savings and how that impacts the American, and the global, economy. Bibliography lists 2 sources.
Page Count:
3 pages (~225 words per page)
File: RT13_SA705eco.rtf
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Unformatted sample text from the term paper:
on to note the fact that Americans are not saving very much and that politicians are not able to get rid of the deficit (Miller, Ewing, Reed, Cohn & Balfo,
2005). According to authors, this means that Americans have to look forward to rising interest rates and a sluggish economy (Miller, Ewing, Reed, Cohn & Balfo, 2005). The article effectively
blames Americans for not saving. Then, the article takes a turn, noting that the past two years has seen an increase in savings (Miller, Ewing, Reed, Cohn & Balfo, 2005).
This is good. However, authors claim that the global economy is having a difficult time knowing what to do with the extra funds (Miller, Ewing, Reed, Cohn & Balfo, 2005).
The article also warns that investors are looking for higher returns, which means they are channeling money into riskier vehicles (Miller, Ewing, Reed, Cohn & Balfo, 2005). The article ends
with this dismal warning: "If global savings is channeled in the right ways, it can be a great boon for the world economy, enabling the sort of investment and risk-taking
that fuel growth. But theres far too much evidence right now that low rates are encouraging behavior that could cause trouble. Hold on to your hats" (Miller, Ewing, Reed, Cohn
& Balfo, 2005, p.58). Are their observations true? It seems that on the surface, authors are saying two things. They contend that the encouragement of savings is a good thing,
but at the same time contend that this sudden increase in investing can be troubling for the global economy. It does not sound as if this is logical. Yet, the
premise has support. Feldstein (2006) concurs, stating that an increase in savings can create problems for the global economy. He writes: "The downward trend in U.S. household saving will likely
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