Us Financial Reputation on International Level

The United State’s financial reputation on an international level

The US financial reputation is in constant discussion and turmoil. According to Jonathon Masters, editor at Renewing America states, “Unless appropriate legislative action is taken, many analysts say, the national debt will become unsustainable, growing at a faster rate than GDP and commanding a growing percentage of government revenues to pay the interest.” The national debt is growing more and more each year and does not seem to be improving. This is tarnishing the financial reputation of the US. Many countries are interest in borrowing from the U.S. treasuries, but with the constant deficit and national debt increase, the reputation on an international level is dwindling. The U.S. treasuries are still among the safest assets in the world, but reputation is falling.

A domestic automotive manufacturing (exporter)

Deficit and Surplus have a major effect on Exports and Imports. For an exporting business in the automotive industry, more jobs will be outsource to countries with a competitive advantage on labor and production cost. This trend decreases the labor force in the automotive industry domestically because outsourcing labor decreases the operating cost of manufacturing. The opposite is also true, if the government is running a surplus the national interest rates are lower providing the opportunity to start or grow their business further, which encourages domestic spending increasing the labor force and exports of goods.

References

Colander, D.C. (2010). Macroeconomics, Eighth Edition. Boston, MA. McGraw-Hill/Irwin.

Masters, J. (2011, August 2). U.S. Debt Ceiling: Costs and Consequences. Council on Foreign Relations. Retrieved from http://www.cfr.org/international-finance/us-debt-ceiling-costs-consequences/p24751

Riley, B. (2012, August 13). Budget Deficits vs. Exports. The Foundry. Retrieved from http://blog.heritage.org/2012/08/15/budget-deficits-vs-exports/