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World Economy 2012 in Review

The American economy improved in 2012, but the rate of growth remained low. America's jobless rate fell to its lowest level in four years. Average home prices ended a long period of decline. And money started flowing into financial markets again. But at the year's end, many observers said the economic recovery had not been as strong as they had hoped.

Like many other countries, the United States is spending more money than it is receiving. Some countries are spending money they do not have in an effort to get their economies growing again. Yet, many experts say spending money you don't have, or deficit spending, has caused global financial problems with debt, especially in Europe. Other economists say the mathematics is not that simple.

Desmond Lachman of the American Enterprise Institute says that deep budget cuts in Greece have only produced a deep recession. Some see political inaction as a threat. Financial reform activist Robert Bixby says the biggest problem for the American economy is the country's political system. He says political dysfunction is a bigger threat than economic problems.

Federal Reserve Chairman Ben Bernanke says the country does not have to be this way. Recently he has urged lawmakers to provide leadership. He has called on lawmakers to cooperate and creatively deliver fiscal clarity, or a clear path to solving the nation's budget problems. On January first, Congress agreed on new tax legislation. The measures took the place of larger tax increases and budget cuts that were to take effect automatically at the beginning of this year.

For VOA Learning English, I'm Alex Villarreal. (Adapted from a radio program broadcast 04Jan2013)