Economic And Social Theory Of The United States Essays

1015 Words Sep 11th, 2015 5 Pages
Through history, the United States went through a series of events that were fluctuating between good and bad. The United States shifted from the expanding welfare state in 1960s to neoliberalism in the 1970s and 1980s through neoliberal policies. This shift was purely bad because it affected the nation negatively. Neoliberalism is an economic and social theory that free markets and free trade is the best way to structure society. This means reducing society to no regulations and privatization of every aspect of economic and social life. As a result the United States moved from being the world’s largest creditor nation to the world’s largest debtor nation. These neoliberal policies on trade deficit, deindustrialization, deregulations, and supply-side economics had destructive effects on inequality, race, labor, finance, and democracy of the United States.
An early contributor of the recession was the US trade deficit. Imports expanded twice as fast as American exports. In other words, more money is flowing out of the United States as more of the goods are flowing in. With more money overseas, the value for the dollar was decreased. The money supply needed to be increased so the result was inflation. Specifically, this hurt the people in poverty more than anyone else because they had to pay more for the same commodities. President Nixon wanted to curve inflation so had the Federal Reserve raise interest rates and shrink the money supply. The result was stagflation, a slow…

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