Heads Up, Seven Up Essay Example

Heads Up, Seven Up Essay Example Heads Up, Seven Up Essay Heads Up, Seven Up Essay The article Head up, Seven Up was focused on the finance ministers from seven industrialized nations who were meeting in Paris this weekend to discuss ways to improve world economic growth. This meeting is commonly referred to as the G7. The article stated that the U.S.s value-oriented economic growth package was a key topic during the State of the Union address and will also be addressed during the G-7 meeting. The war of terrorism was another topic discussed. The group thought that it is important to encourage developing countries to grow faster in the coming years to discourage terrorism among its people. The American economy has been growing steadily and as a result it grew 2.8% in 2002. Januarys retail sales, commodity prices, and industrial production were all strong suggestion the economy will continue to grow in 2003. The new tax cut package which eliminates double taxation of dividends is also expected to add to the economic growth in 2004. The group felt that Americas strong economic position required them to project more vision and economic leadership abroad. In response the U.S. felt that much of world growth depends on sweeping growth-oriented IMF reform. But, ultimately the IMF controls economic standards around the world and in the past the U.S. has taken much of the blame because of our supposed control of the IMF. The group felt as if the Argentinas debt crisis and Japans deflation crisis both situation deserved special attention. The assembly gave Japan a clear statement: use a simulative monetary policy to end deflationary expectations. The results from the G7 meeting may not change the way in which our world economy operates. But, several of the worlds economic and financial problems are solvable and this meeting lays a solid foundation for our economic future. Class Concepts Geber states that the G7 meetings goal is to achieve a desirable level of world economic growth. The purpose is to avoid one nation taking an unequal burden. This is especially important when a nation attempts to expand their economy. If the country expands too rapidly then the other countries may not be able to keep up with there exports and the nation attempting to expand its economy may be stuck with a surplus. For a successful world economy all countries must grow evenly and if a country grows to fast others may not be able to keep up with them. In the end the country growing to fast may be hurt the most. The G7 annual meeting in a way is a check and balance system for the worlds economy so that no one of the seven leading economies does not grow to fast for their out good. Gerber then goes on to say the G7 meetings is a great idea for our world economy but, the political problem is that there is no international organization capable of arranging a multilateral agreement among nations. He then adds countries enter and leave slow growth periods and recessions at different points in time and it is rare that one policy is suitable for everyone. Reaction I felt that the article was very informative. I was very unfamiliar with the G7 meetings and gained a great deal of knowledge from the article. As an American I found the article to be discriminatory because it put America on a pedestal and blamed some of the world economic problems on us. But, the article also stated that America favorable economic position required them to set and example for the rest of the world to follow. I agree with this and think the U.S. must adjust their policies accordingly. The article did not mention the implications the meetings have on the rest of the world. By looking into the text I discovered that many of the decision from the meetings have little value and are disregarded. But, the article did end with and interesting point and stated that the G7 meetings are simply just a starting point and a way in which to establish the foundation. The article put a lot of emphasis on the American economy especially the new tax plan. Many feel that the new tax plan would spark a stagnant American economy. However, the G7 meeting acknowledges that the U.S. economy has been growing steadily while others are falling behind. They feel this new tax plan will give America an unfair advantage but, as an American who pays taxes I feel that the tax plan is a good thing that meets Americans need for lower taxes and would not expect anything less. Article Text Heads Up, Seven Up The finance ministers of the seven major industrialized countries meet in Paris this weekend to discuss the state of the world economy and ways to improve growth. The U.S. brings to the meeting the bold, values-oriented approach to economic growth that President Bush chose with his tax proposals and State of the Union message. It could be a strong starting point for a broader prosperity initiative to replace the IMF fixation on austerity for the poor. The war on terrorism adds urgency to our interest in seeing developing countries grow faster in coming years. A discussion of faster global growth should go arm in arm with the planning to help Iraq in the aftermath of a possible war. New Treasury Secretary John Snow will be a welcome addition to the G7 group. While he probably wont be able to transform the dialogue toward prosperity just yet the meetings are in Paris after all he is expected to bring a healthy dose of energy and confidence. Fortunately, the U.S. economy is giving Mr. Snow an assist. Despite rampant negativism, the U.S. grew 2.8% in 2002. Januarys industrial production, retail sales and commodity prices were strong, signaling reflation underway. The U.S. economy employs 131 million workers, most of them flexible and increasingly productive. The prospect of a cut in the income-tax rate, increased incentives for saving, and the elimination of the double taxation of dividends add further to the growth potential. Given our economic strength, the U.S. has an obligation to project more vision and economic leadership abroad. Low expectations and fear of growth have plagued past G7 dialogues. Recognizing core U.S. economic values sound money, low tax rates, free trade, limited government, and a belief in rising living standards for all is fundamental in overcoming these fears and building faster global growth. Part of this will depend on sweeping growth-oriented IMF reform. The IMF controls the economic rules around the developing world, including in key U.S. friends like Turkey, Indonesia, and Pakistan. They suffer impoverishment, with the U.S. getting much of the blame due to our supposed control of the IMF. Among the countries in need, Latin America deserves special attention. Argentinas debt crisis is festering. IMF-related tax riots and 29 deaths scarred Bolivia last week. Apart from Mexico, most of Latin America is closed off from world capital markets. The IMFs standard program of currency volatility repels capital inflows and means high interest rates across the region. With the added prescription of high tax rates, investment and trade liberalization are unlikely. Sound money and trade liberalization can also be a growth-oriented alternative for the countries that French President Jacques Chirac has threatened to keep out of the European Union. For pro-U.S. countries in Eastern Europe, including Turkey, to whip their own economies into shape would ultimately offer more economic benefits than joining the E.U. Another topic certain to be discussed at the G7 meeting is Japans malaise. In 2002, Japan suffered record deflation. Its GDP shrank to less than $4 trillion. The standard message of structural reforms fails the tests for boldness and effectiveness. This year, the G7 has an opportunity to send an unusually clear message to Japan use a stimulative monetary policy to end deflationary expectations building on Alan Greenspans unequivocal December speech about a central banks power to stop deflation.