A Look Back at Economic News of 2012

December 29, 2012

President Barack Obama speaks about the 'fiscal cliff' talks at White House Dec. 28, 2012

From VOA Learning English, this is the Economics Report in Special English.

The American economy is improving, but the rate of growth remains low. America’s jobless rate fell in 2012 to its lowest level in four years. Average home prices are no longer falling. And money has been flowing into financial markets.

But as the year ends, most observers say the economic recovery has not been as strong as they had hoped. One reason for the recovery is federal spending. Like many other countries, the United States is spending more money than it is receiving in taxes.

Some countries are spending money they do not have in an effort to get their economies growing again. Richard Rahn is an economist with the Cato Institute.

“If countries had only been spending within their means in keeping spending growing no faster than the rate of economic growth, we wouldn’t have the global economic mess.”

But other economists say the mathematics is not that simple. Desmond Lachman is with the American Enterprise Institute. He notes that deep budget cuts in Greece have produced a deep recession.

“Because what we’re doing is, we’re really applying very stringent austerity measures. The IMF concedes that the austerity hasn't been working, yet the Europeans are persisting in the same kind of austerity that got them into trouble in 2012, so something’s got to give.”