May 20, 1999 Global Economy

US in the Global Economy w US is the economic engine of the world w Japan is in a 10 year recession w Europe slow growth and high unemployment w Asia and Russia in crisis

Economic Growth Depends on w Natural Resources w Labor w Capital w Entrepreneurs w Adequate Market

Keynesian Economics w GOVERNMENT HELPS TO STIMULATE ECONOMY w DEFICITS ARE USED TO PROMOTE GROWTH w MASS CONSUMPTION IS THE KEY

Then and Now w There is a safety net social security unemployment insurance w Goal of government is full employment

% of Labor Force in Agriculture

% of GDP in Trade,

Exports/Imports as % of GDP

Trade in Goods & Services

US Trade Strengths w Aerospace, Grain, Woodpulp, entertainment, electronics, financial services

International Global Network w US economic embargoes do not work w Russian debt crisis is more significant to the economy than Kosovo w Interdependencies of global capital markets

The World Bank w Supports Development w Self-Sustaining w Integration in Global Economy w Headquartered in US w Strong currency

The International Monetary Fund w Monetary Support w Global Balance of Payments w Regular currency transactions w Loans to support letters of credit and domestic banking system

NAFTA -- USA, Canada, Mexico w Integrated markets w Stabilize Mexico w Limit Japan Inc. w Job Loss w Environmental Degredation w Wage supression

Foreign Aid Facts The U.S. spends about $12 billion per year on foreign aid. There are 156 countries that receive foreign aid from the U.S. The large recipients are Israel, which gets some $3 billion per year, and Egypt, which gets some $2 billion per year. These two countries alone make up some 40 percent of the entire foreign aid budget. Military and security assistance accounts for about 25 percent of all aid, humanitarian and disaster relief assistance about 15 percent, and economic and development assistance about 60 percent. 1% of Budget