Dave's ESL Cafe's Student Discussion Forums

[AustriaStudent]

Hi, do you think that the worldeconomy is in a slump? The $ Euro relation does not be very cooperative for europes and the american economy. Do you thing that Mr. Bushs tax cut plan will help? I think that cutting dividend tax is very good, but not the right way.

[ilya]

Reforms can help people, national economics (growth of it) or some interests of oligarchs and beauracrats. Whom exactly? It depends on quality of reforms.
The cut of taxes give the economics a growth. But if you don`t increase expenses. USA has increased expenses very much, so USA would have a deficit of budget by the end of the this year. These points reduce a growth. On my opinion USA would be in a stagnation as long as USA don`t reduce expenses.
The other problem is dollar. Many people think (and I too) that one of the reasons of starting the war was weakening of dollar. People started prefering to make savings in euro, make invesments in euro. So, dollar is being lost the status of first currency (in Europe exactly). The rate euro-dollar went to the advantage of euro. The consequences of falling dollar can be bad and good for economics of USA. The weakening of dollar give the advantage to national producers. But inflation would increase very much (because prices of european and others products increase), inflation reduce investments. Without investsments and with weak dollar economics of USA would go down.
So, the war would strenghten the dollar`s status of first currency (in arabic countries exactly). Besides, Europe wants that world price of Oil would be quoted in Euro too (not only in dollar). But after this war Europe can forget about it.