United States is the one of the biggest economic machine in the world.

They represent 17% of

global GDP. The US dollar is the most used currency in international transactions and also used
for reserve currency among foremost country in the world. In 2015, several economists projected
the growth of US economy will reach 3 percent or more despite of weak spending by consumers
and businesses. This is better than US economic growth on 2014 which grew by 2.4%.
IMF even believe that US economic is turning in its best performance since 2005. This
assumption based on the raise of consumer spending fueled by low oil prices and strong US
dollar. This is a very contrast condition to 5 years ago. On 2010 US economy is in bad shape due
to recession. While the 2008 derivatives market and subprime mortgage caused crisis still have
repercussions on economic, the total debt of government, corporate and personal has reached 360
percent of GDP. The number of housing foreclosure and unemployment is raising. The number
of unemployment is doubled compared to 2005 and residence foreclosure has reached for nearly
26 percent. The US government debt take 90 percent of GDP. This is very alarming condition for
US economic.
On 2011, US economic is started to emerging from the worst economic state in generations. The
number of job vacancy is raised, manufacturing sector is growing and the compliance for
accountable financial market was applied to ensure 2008 crisis will never happens again. The US
government are focused on strengthen middle-class Americans households, savings and cuts
expenses, and tax reform. They believe that fair tax distribution are the way to share equal
welfare among Americans and the key of sustainable prosperity. This policy started to gain
benefit on 2012. The businesses is growing and created 6 million jobs almost twice than 2011.
The housing market is healing and corporate profits reached all-time highs. Despite of the
breakthrough, US still realize that they need to find way to accelerate the jobs creation in
manufacturing section, increase wages and incomes for working Americans and equip the
workers with necessary skills.
During the 2013, US experienced 4 years consecutives of economic growth with the lowest
unemployment rate in 5 years. US deficits was cut by more than half and benefit the surplus in
oil production and international trade. Under the circumstances, US government started to speed
up the economic growth by creating more new jobs, trained more Americans with skills, enhance

education to children and raise the incomes for workers. US government also concern in tax
reform and innovation in business and technology. These advance steps gain its breakthrough
along 2014.

In 2014 US economy creating jobs at the fastest pace since 1990s. The

unemployment rate keep declining, deficits cut by two-thirds, stock market doubled, and lower
dependence on foreign oil also more investment on renewable energy. In 2014 US advanced to
next step in building bigger and better economic. Theyre concern in strengthen on middle-class
Americans by giving them better security on education, health and family welfare. US also
reform the benefit and taxes for the workers so they will receive more fair income related to the
employment.

U.S Stabilization Policy

It's clear that stock prices and housing prices have played a large role in the economy of U.S
government. The problem for policy makers was to predict change in stock and housing price.
The assumption based on the raise of consumer spending, but still U.S government can't predict
the crisis.
Dollar depreciation lead inflation and rapid increase in U.S long term interest rate. A resulting
sharp fall in the price of a range asset. Government should take stabilization policy to smooth out
fluctuations in output and employment and to keep price as stable as possible. The goal is set the
inflation rate that close to the target. So household and stock price remain stable and it could be
turning point to make good grow to U.S government.
To stable the inflation, U.S government commitment to budget discipline. The budget discipline
mean to cut the tax and make stimulus package. The stimulus contain, rising expenditure on
healthcare and unemployment all contributed to deficit of nearly $1,5 trillion just under 10%
GDP and make some tax adjustment. Although U.S government still borrowing to investors and
for the stabilization, U.S had increase debt.
"What happens if a country like the United States continues to run large structural deficits year
after year? Deficits require that the government borrow money to finance them. In the case of the
United States, the U.S. Treasury must sell bills and bonds. If the Fed buys them, this increases

the money supply, which means that the government is simply financing the deficit by printing
money"1
To finance U.S government, they would sell some assets like sell bills and bonds. Government in
this case print out a lot of money. The government hope that people and global investor want to
buy the bond with decrease the bond price. But it's not that easy to sell bound to investor after
deficits happen.
The problem government when trying to stabilize the economy was, the economy reaches a peak
and begins to slide into recession. The policy makers do not observe the decline in GDP until it
sunk. Policy need several weeks to compile, so there was a gap time between policy and market
respond. United state stimulus have to calculate lag when they took step in policy stabilization.
Policy stabilization must be a tool for regain trust from global investor. In order to reduce
investor concern about their prospects.

Karl E. Case, Ray C. Fair, Sharon M. Oster. Principles of Economics. Boston. Prentice Hall. Page 610