Government Shutdown, Essay Example

The Truth about Administrational Adjustments and the Federal Reserve

The international economic system work in a chain that makes it possible for one country’s operation to directly affect the other especially in cases when it comes to determining the capacity of a nation to utilize its federal reserve to support its growing economy. Like in a common business venture, there are instances when the funds and resources of the organization begin to decrease in value especially in connection with the current trends in the market. To be able to withstand the challenge of readjusting the budget of the organization, some business administrators to shut the business down for some time and reset operations. This shall prevent the business from completely closing down. In the same manner, the government also entails to create a particular determination on how to face particular financial problems through shutting down the entire operational system before reopening again. This allows the government to seek particular issues in the organization of the administrational operations and create distinct changes as to how everything is being given attention to. Question is, for a public institution such as the government, is shutting down the whole operation necessary? Would it not be more dangerous than helpful to the people and to the nation as a whole? The determination of practical response to these queries shall be better given attention to in the discussion that follows. Notably, to begin the presentation, it is first important to establish the foundation of understanding from where the necessary explanations could spur from. In this case, it is important to first understand what Federal Reserve is, how it is used and how it is managed according to the needs of the country and its people.

The Federal Reserve is a system that intends to mandate the overall circulation of money in and out of the country. For instance, when the country engages in export trading in an international scope, the Federal Reserve systems intend to mandate how the profit from such operations are to be kept and recorded accordingly for future reference and actual monetary utilization. Along with this, the same system also entails to make a connective value between institutions such as that of the banking entities to make specific policies that could empower the people to both save and spend at a balanced term thus supporting the financial needs of the country to be able to embrace a greater sense of development and progress among the different aspects of nation-building.

To make sure that everything is overseen effectively, the Federal Reserve System comprises of the operating responsibilities among Presidentially Appointed Board of Governors, the FOMC or the Federal Open Market Committee and the twelve regional Federal Reserve Banks that are situated in major locations in the country. With both private and public components operating in the system, the organizational approach of the Federal Reserve System largely involves direct determination on how the financial assets of the country is utilized and managed according to the needs of the people and the needs of the economy to be able to thrive continuously in a manner that would best benefit the country. With this system, the US Federal Reserve System is able to stand as an independent unit that determines its path towards progress or towards stagnation for the sake of supporting the survival needs of the people amidst the impending financial situations that the country needs to face.

The current occurrence by which President Obama’s administration decided to shut down the government has led people towards determining why such situations occur and why are they seemingly necessary for some nations, especially the developed ones like the United States. In 1995 and 1996, there had been a distinct disagreement between the Republican and Democrat parties specifically directed towards the spending of the government on particular projects that have been established under President Clinton’s direction. Hence, to decide on the matter, the president decided to shut down the government, not once but twice in a row. During the time, all the government services were cut and the people became adamant of what would become of their government after such incident. Nevertheless, it could not be said that the shutdown in the past could be specifically compared to the shutting down of the US government at present. First reason is that the deterring parties during the time were open to compromise and conversation. The issue notably evident then was a mere distinction of project-clarity and fluidity, whereas some members of the government did not see the evidence of Clinton’s administration to be doing as much as it is supposed to be to resolve the problems.

On the other hand, Obama’s shutting down of the government is somewhat a distinct decision which spurred from the ongoing challenge towards his capacity to bring America around against the effects of financial recession that has long been battled by America since the year 2007.  Aside from that, unlike the parties involved during the 1995-1996 shutdown, the parties involved in the situation today are not willing enough to participate and compromise for the sake of finding the right resolution to the problem.

The issues at present could be considered larger and harder to manage compared to the prior government shut down. Not only that; the current situation of the American economy is largely affected by the situations occurring among its neighboring countries and economic rivalries. In Europe, for instance, the country is currently facing a great deal of economic turmoil especially in relation to reestablishing their culture under a more modern concept of seeing how economy should determine human status. The Eurozone [as it is called by economists; which include all the different nations in the greater territories of Europe] is noted for its culture of social classification according to wealth. Even nations within the region are competing for such social reputation. This is the reason why Germany’s bankruptcy in the past has made it one of the weakest economic links in the region. This affects the overall international performance of the region in relation to economic development and relative connection with the regions in America.

China on the other hand, serving as one of the toughest economic rivalries of the US, also faces a distinct problem of having an almost unstable reign in the Asian economy. The emergence of a new culture of replication of products in the country has made it one of the most sought after providers of cheap versions of new innovations in the market; nevertheless, its inability to create something that is its own makes the country vulnerable to massive market change in relation to buyer-perceptions which is bound to happen especially in consideration with the current economic situations happening around the globe lately.

Although the connection is indirect, the US economy is linked towards the economies of both its allies and its rivalries when it comes to commerce. Hence, relatively, the American Federal Reserve Systems aims to be distinctively apprehensive on the situation thus requiring the government to make specific decisions that could be drastic at some point. President Obama’s movement towards responding to the challenge specifically determines his desire to reassess the situation and make use of current assets of the country to resolve financial issues and hopefully calm off political stresses in the country.

Works Cited

The Federal Reserve System: Purposes and Functions. Board of Governors of the Federal Reserve System. 2005.

The Federal Reserve in Plain English. Board of Governors of the Federal Reserve System. 2006. from the St. Louis Fed

Epstein, Lita & Martin, Preston (2003). The Complete Idiot’s Guide to the Federal Reserve. Alpha Books.

Greider, William (1987). Secrets of the Temple. Simon & Schuster.

W. Hafer. The Federal Reserve System: An Encyclopedia. Greenwood Press, 2005. 451 pp, 280 entries;

Meltzer, Allan H.1951 (2004) A History of the Federal Reserve, Volume 1: 1913–ISBN 978-0-226-51999-9 .