American Government Interaction on Businesses, Essay Example

The American government policies for labor and interest rates are tied in closely to American business, which ultimately impacts its citizens and economy. Ultimately, the economy of a country is strong when there is a small unemployment rate. Therefore, American policies that attempt to reduce unemployment contribute to economic stability and thus wealth for citizens. In particular, a common practice in the country is to invest budget spending into jobs programs that allows the government to hire both workers and businesses directly to provide services necessary for government operations (Amadeo, 2014).

Cutting taxes and increasing government spending are additional ways that have proven to improve American business and create jobs (Pettinger, 2011). Lower taxes ultimately result in higher disposable income, which can be reinvested in business. An additional method that helps reduce unemployment and increases the American economy is by passing measures that contribute to the increase in inflation. Increasing inflation results in a decrease in employment (Economics Help, 2011). Therefore, government policy is needed to create a balance between increasing inflation and increasing unemployment because both factors contribute to a well-balanced economy.

The American government can encourage the reduction of unemployment by providing businesses with incentives to take on a greater number of employees, which has occurred in the past. These incentives include tax breaks, which ultimately benefit corporations in the long run because it allows them to have more money to reinvent in their business. Furthermore, the regulations that the American government imposes over corporations also have an impact over unemployment and the economy. For example, in situations where business is primarily conducted within the country, the greatest degree of economic benefit is seen.

References

Amadeo K. (2014). Unemployment Solutions. Retrieved from http://useconomy.about.com/od/suppl1/p/Unemployment-Solutions.htm

Economics Help. (2011). Inflation v Unemployment. Retrieved from http://econ.economicshelp.org/2011/10/inflation-v-unemployment.html

Pettinger T. (2011). Policies for Reducing Unemployment. Retrieved from http://www.economicshelp.org/blog/3881/economics/policies-for-reducing-unemployment/