Example Of Net Exports And Gross Domestic Product (GDP) Of US Versus Other Countries Article Review

In this article about the impacts of massive debts on the economy of USA and its citizens, a number of key issues were discussed. It shows the tragedy America as a country is facing as a result of significant amounts of expenditure whose gap cannot easily be filled by the current income. What next then for the American citizens. Evidence in this article shows that once the public debt tips 90%, the danger imposed on this economy is unbearable for American citizens.
Study, however, shows that countries with such percentage in debts are at a danger of retardation in terms of its economic growth for an extended period.
Rapid increase in interest rates, general increase in the prices of commodities and congestion in non-government investments invents serious danger to every American, and at the same time pose lament on the poor, aged and the average citizens of America. This presents Greece and Japan as a scenario of ways through which pending debts can affect the economy for a long time

This therefore, calls for action by all stakeholders of US so that debts do not become unmanageable (Boccia 2013).

Clearly four issues have been discussed in this article. Firstly, weakness in resolving the difference in income and expenditure of America as a state. Much as there was an action by President Obama and his counterpart the Congress, the debt level still shoots high. As this tragedy goes to America as a country continues to lose its glory as its rating is reduced. What could this storm be for the Americans? Tax increment from 18.55 % to 20% hence an urgent call for action.
In a confirmation by study, the picture of the risks of high Government is brought clearer to call all stakeholders to action. According to (Reinhart, Reinhart, and Rogoff), countries with 90% GDP suffer from chameleon pace when it comes to economic development hence a general low life style for its citizens. This was based on 66 countries from every corner of the world with the analysis of the impact of too much debt on these countries. These results act as a guideline for stakeholders (Boccia 2013).
How do this debts lead to retardation of economic growth? In the author’s arguments, three ways through which this leads to economic are briefly discussed, higher interest rates for a country that has debts. Creditors stand at an advantage hence putting borrowing country in the shit. A second impact is increased prices of commodities. Increase in the product price affects the purchasing power of low-income earners. It also makes people run short of their savings (Boccia 2013).
Another impact of inflation is that it overcrowds out private investment. This is because the investors have to keep the trend with the current increase in the prices of commodities.
In conclusion, this article is an opener to the stakeholders in every country so as to reduce economic strain in countries. More so countries like America that is a super nation that acts as an example for almost every country. That means woe to the other countries.

References

Boccia R. (2013) How the United States’ High Debt Will Weaken the Economy and Hurt Americans. The Heritage Foundation. Retrieved from http://www.heritage.org/research/reports/2013/02/how-the-united-states-high-debt-will-weaken-the-economy-and-hurt-americans