Recently, the United States economy has done pretty well for itself since the recession. Unemployment has gone down exponentially, more individuals can afford mortgages and living expenses, and there is an influx of technology available in the production process. However, in a growing economy, there is usually a rise in interest rates, and that greatly affects the citizens of the United States.

With a growing economy, more individuals are able to get jobs. More people are able to make a living and afford living expenses. This means that there is a lower unemployment rate for the entire United States. Usually, when more individuals are working and receiving good benefits in a booming economy, they are able and more willing to purchase other goods and invest their money. This means that more families will be willing to pay to go out and see a movie in theaters and go out to eat more often and purchase more things that they do not need. In the long run, with the exchange of money going on and an increase in individuals willing to spend their money on unnecessary things, they are actually investing money to stimulate the economy. The more people spend, the more the economy can expand, which in the end causes us all to get a little richer. Now, individuals are also more willing to invest their hard earned money and take their chances investing in the stock market rather than saving their money. This also stimulates the economy because people are investing their money on companies, big corporations and commodities. This causes an influx in technology offered to both individuals and companies alike. With a growing economy, it contributes to a greater amount of capital and production capabilities for all.

However, as the economy grows the Federal Reserve decides how to raise interest rates. Yes, I know I am probably boring you by now talking about the exchanging of money and introducing interest rates, which we all believe are pretty bad. Actually though, interest rates are a good thing, especially if the Federal Reserve decides to raise them for the entirety of the United States. This is because an increase in interest rates from the Federal Reserve is proof that the economy is improving. Higher interest rates shows that borrowing costs for all are higher and people should initially spend less. This shows that the economy is more stable and that people do not have to continue spending as much as before to help give an economic boost for the overall countries’ economy. In general, yes everything will be more expensive for the general public. Although, the thing about interest rates is that they adjust to compensate for economic changes. That means that even at first, the change seems odd to hinder the amount of consumption that Americans spend, it means that we are getting richer. Of course, this will not really affect the spending of consumers overall because Americans have a consumer society but higher interest rates are supposed to encourage less spending and more saving.

So, a supposed rise in interest rates would be a good thing for the United States economy. However, the question is, “Are the American people ready for a change in interest rates?” Now, of course the Federal Reserve is leaning toward yes because more people are employed, the economy and market are more stable due to people spending more, so a little raise in interest rates would not impact the general public as much as you believe. So, yes in my opinion our economy is stabilizing and we need to have a bit of encouragement to save our money instead of consuming things we do not need. Unfortunately though, knowing the mindset of others, the spending will not stop, but the borrowing of money on credit cards and loans may slow down a lot due to the greater amount of money that borrowers will have to pay back lenders. Interest rates are very interesting when it comes to manipulating people and where they decide to put their money and it is how the government keeps our economy in check.