In this assignment, I will be explaining what the Federal Reserve is and what it does to the economy.
The Federal Reserve
The Federal Reserve is the central bank of the U.S. In short, it is a super bank that connects all banks together. It is closely tied to the U.S. government. It was originally created to allow banks to extend more loans without having to worry about the consequences.
The Federal Reserve (often shortened to Fed) has many functions. It primarily controls the money supply, but it also issues new currency, serves as a last-resort lender, and is a bank for the government. The Fed can also collect data and do economic research.
The Fed was created by the Federal Reserve Act of 1913. Just a few years earlier, the nation had experienced the Panic of 1907, when many banks failed and the stock markets crashed. This scared a lot of people, eventually leading to the creation of the Federal Reserve.
One common misconception that some people have about the Fed is that it is a part of the government. Although the Fed is closely tied to the government, it is not technically a part or branch of the government.
The Federal Reserve impacts our economy by making policies and giving bailouts to banks. Some of these policies can restrict the economy, and are not helpful. The Fed can also increase the amount of money in circulation, although they don’t directly print it.
In this assignment, I will be summarizing the history of Space Exploration, specifically focusing on the Space Race between the U.S. and U.S.S.R.
Early Milestones
Humans have always been looking up into space, wondering what things are like up there. Early literature has many mentions of space, even before people started to explore it.
It is hard to decide the first major milestone in space exploration, as there have been so many developments. The first airplane flight was a very important milestone, as was the first rocket flight. The Germans built many rockets during WWII, as did the Russians and the Americans later on. The U.S. launched many rockets to gather information about the atmosphere.
The Space Race
The first satellite (called Sputnik 1) was launched in 1957 by the Soviet Union. It came as a surprise to many people, as they didn’t think the Soviets were capable of such advanced technology. In the same year, the Soviets launched the Sputnik 2, which had a dog inside of it! It was the first living being in space. The U.S. scrambled to develop a satellite of their own, and in 1958 they launched the Explorer 1.
Keep in mind that the tensions were high between the U.S. and the U.S.S.R. during this time, as both were developing more and more powerful nuclear weapons. This was a major factor as to why the Space Race happened.
After the Sputnik’s success, the Soviets started working on developing a spacecraft that could carry a human in it, and in 1961 Yuri Gagarin was launched into space inside the Vostok 1. The U.S. later launched a spacecraft that carried Alan Shepard into space.
On May 25, 1961 JFK promised America that man would land on the moon by the end of the decade. This sparked a race to the moon that would last the whole decade, with both sides making major developments and enhancements to their spacecraft. On July 16, 1969 the Apollo 10 was launched into space towards the moon with 3 humans on board, and 4 days later they successfully landed on the moon! The U.S. had achieved their goal.
Space exploration still continues today, with many important developments like the James Webb Space telescope. NASA is planning to land a man on Mars by 2040, so it will be exciting to see if that happens!
This unemployment rate graph suggests that the unemployment rate is much higher than the government is trying to make people think. The red line is the official unemployment rate according to the government. The blue line is the ShadowStats alternative unemployment rate. You can see that it is a lot higher than the “official” unemployment rate. If you look at the graph, you can see several spikes that mark recessions, with the big spike near the right side of the graph being the COVID recession. Having a 25% unemployment rate is not at all great for the economy!
This chart shows the GDP annual growth in the U.S. GDP stands for Gross Domestic Product, which is the total value of all the goods and services that our country produces. (Note that this is the measure of the percent change in GDP, not total GDP). In this graph the official GDP shows as being fairly high, and only going below 0% a few times. The ShadowStats alternative tells a different story! It shows that the GDP is actually a lot lower, and has dipped below 0% quite a few times, which means that our country had actually been losing value during those times!
The inflation rate is another marker of economic health. This chart only goes up to mid-2023, but currently the official inflation rate is around 3%. That doesn’t sound very high, but according to ShadowStats, it is a lot higher! An interesting thing to note on the graph is that while the official inflation rate goes below 05 a few times, the ShadowStats alternate inflation rate never does! In fact, its lowest was just under 2%. You may be wondering why inflation is bad, so I’ll explain it in a simple example.
Imagine an economy where the total money supply is $100, and you own 10 of those. You would own 10% of all the money, making you very wealthy! Now imagine the government of this fictional economy printing $900. This would bring the total money supply to $1000, and you still own 10 of them. But now you have only 1% of the money supply! It is even more hurtful to the less wealthy people! In our economy, the government can print out money anytime (and in fact all the time), which is constantly making our money worth less and less. Inflation is only helpful for the government, and only during the short run.
Tariffs
I don’t have a graph for this one, but I’ll start by explaining what tariffs are and how they impact our economy. Tariffs are basically taxes on other countries. If you set a 25% tariff on all goods from Mexico, for example, then all the people who bring avocados from Mexico to the U.S. must pay 25% of the price they are selling them for to the U.S. government. This forces the people who are selling avocados to increase their prices so they can make a profit, which makes us pay higher prices for our avocados.
Currently, many tariffs are being imposed on other countries, which is probably going to make stuff a lot more expensive!
Conclusion
According to the reasons I have mentioned, the U.S. economy is not doing great. We are having high inflation rates, high unemployment, many tariffs, and low GDP. I sure hope our economy will be able to recover from this!
In this week’s assignment, I will be summarizing the lives of three different presidents. They are Richard Nixon, Gerald Ford, and Jimmy Carter, and they were all president during the 1970s.
Richard Nixon
Richard Milhous Nixon was born on January 9, 1913 in California. He received an education from Duke University, and decided to pursue law. He met Thelma Ryan and married her in 1940. Nixon also served a short term in the Navy during World War I. After the Navy, he became a member of the House of Representatives. Nixon’s popularity was boosted after his role in the investigation of Alger Hiss.
In the 1952 election, Nixon became Eisenhower’s vice president. Nixon didn’t do much while vice president, but he gained a large amount of popularity.
As president, Nixon was involved in overseas relations, like helping to improve relations between the U.S, China, and the U.S.S.R. But the main thing he is remembered for is the Watergate Scandal. The scandal involved a break-in of the Democratic Party Headquarters. 5 men broke in and stole important government documents. The men were on the Republican Committee to re-elect the president. Nixon tried to cover up this, and it led to an investigation.
Nixon decided to resign to avoid becoming impeached. This was the end of his political career, and he died on April 22, 1994.
Gerald Ford
Gerald Rudolph Ford Jr. was born on July 14, 1913 in Nebraska. His parents divorced while he was a baby, and he went with his mom to Grand Rapids, Michigan. Ford was a good football player when he was at the University of Michigan.
Ford served in Congress for 25 years, and was very popular and well-liked. He was thrust into the vice presidency when Nixon’s VP resigned, then when Nixon himself resigned, Ford became president. One of Ford’s first acts was to completely pardon Nixon. This was very controversial. Ford tried to limit inflation and helped to end the Vietnam war. Ford was almost assassinated twice!
During Ford’s reelection, he ran mostly behind Jimmy Carter, and eventually lost. Ford retired after leaving the White House, and enjoyed golfing and skiing. On December 26, 2006 Ford passed away.
Ford enjoying a game of golf
Jimmy Carter
Jimmy Carter (full name James Earl Carter Jr.) was born on October 1, 1924 in Georgia. Carter, like both Nixon and Ford, went to college before serving in the Navy for a few years. Carter left the army after he heard the news that his father had passed away. He was elected to the Georgia State Senate, and then became governor of Georgia.
After his term as governor ended, he decided to run for president in the Democrat party. He was not very well known at the time, but he won the main election by a margin of 57 electoral votes.
Carter helped to form peace between Israel and Egypt and formed the Department of Energy and the Department of Education. The presidency was also marked by a few small scandals, but they were not very large in comparison to the Watergate Scandal when Nixon was in office.
Carter was defeated in the 1980 re-election by a large margin. After leaving the White House, Carter became a humanitarian and a diplomat. He is the longest lived former president, and he passed away at the age of 100 in 2024.
(Left to Right) Presidents George Bush, Ronald Reagan, Jimmy Carter, Gerald Ford, and Richard Nixon.
