For+U.S.+Economy,+Short-Term+Good+News+Is+Bad+News


 * Title of Article:** For U.S. Economy, Short-Term Good News Is Bad News
 * Source:**[]
 * Date:** April 21st, 2011
 * Explanation:** Many countries, such as China, have extra money that they wish to invest in another country's bonds as a safe way to preserve that money and get it back with hopefully some interest. In other words, they want to invest the money. However, since there are so many different countries which issue bonds, it can be difficult to decide whether a country should invest solely in one, diversify or even which one to invest in. This is where credit rating agencies step in and rate different governments on how reliable and stable a country's bonds are because there are cases, especially in recent times with Greece, Spain and Portugal, where it has seemed very unlikely that a government will be able to repay the principal or give interest due to huge internal economic problems, rendering their bonds very high-risk. The article evaluates different bonds ranging from the EU to Japan to the United States and explains how the US Bonds are the most secure. However, that is only true in the short-term and in the long-term, the US will probably lose that security since there are underlying problems in the economy right now ranging from taxes that are too low to programs for citizens that are inefficiently expensive.
 * Vocabulary:**
 * Gross Domestic Product (GDP): Total value of all goods and services produced within in an economy of a country in a year.
 * Debt:The amount that is owed, as a result of previous borrowing.
 * Deficit: The excess of government expenditures over receipts from taxes.
 * Bonds: A certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money; the issuer is required to pay a fixed sum annually until maturity and then a fixed sum to repay the principal.
 * Credit Rating Agencies: A company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves.

Graph: N/A

Explanation: I think it's a really good idea for the US government to look upon avoiding medium and long-term problems with it's economy. There needs to be measures to curb the deficit and the debt because at the current rate, debt will only increase and increase until it's more than GDP each year, and the United States will no longer be able to maintain the world's trust that it will pay back it's debts. Even if private industries are starting to bounce back well, the government has proved that before the economic crisis, it was already starting to lose money and with the bailout and economic measures taken lately, these problems will only be aggravated. The US can't take it's current recovering situation for granted and should overcome partisan differences to make difficult choices (reduce federal spending, streamline certain prgorams, etc) before debt overshadows GDP and the government is helpless.