The Current State of the U.S. Economy Essay. Words3 Pages. The Current State of the U.S. Economy. The United States economy is racing ahead at dangerous speeds, and it may be too late to prevent the return of widespread inflation. Ideally the economy should move ahead gradually and grow at a steady manageable rate Peter Nesi Bus The Contemporary Workplace Short Essay 2 US Economy Jan/08 Aug/08 Unemployment Rate % % GDP % (roughly) % (roughly) CPI % % PPI % % The US economy has been becoming a slowing economy as we approach the second quarter of the fiscal year. The GDP has increased from January to August but still there has been a large U.S. Economy. The United States economy experienced ups and down in its journey to realize the economic power it enjoys today. After the civil war in the early nineteenth century, the United States’ economy experienced drastic development as a result of urbanization and industrialization. It is evident that United States’ economy embarked on a difficult journey to achieve what it is at the present
The Economic Trend of the United States - Words | Essay Example
The United States of America has instituted various fiscal and monetary policies to ensure that the economy remains competitive. According to the Bureau of Labor Statistics, the economy is the largest in the world although it faces numerous challenges.
High deficits due to the rising federal debt and high rates of unemployment have hurt the overall performance of us economy essay economy. To cushion the citizens against the high levels of unemployment and decelerated economic growth, the government has enacted fresh fiscal and monetary policies Zengp.
This is an analysis of the US economy in recent history, us economy essay. The paper will focus on macroeconomic indicators such as GDP, exports, imports, unemployment and government spending. Us economy essay economic growth has been marginal for the last fiscal year.
Gross Domestic Product GDP shows that the country grew by a minimal 2. The slowed growth has resulted in increased pressure on the economy that has already experienced the effect of increased government spending and the accumulation of federal debt. In the first quarter of the current fiscal year, the revised figures show that the economy grew marginally by around 0. Inthe economy recorded negative growth in the economy us economy essay indicated in the figure below.
Undoubtedly, the current economic growth is weak. The rationale is that the economy has an imbalance of payment where the imports were us economy essay than the exports in Besides, the country has to grapple with the recession that ensued after the infamous financial crises of Questions about the rule of law within economic realms have us economy essay apparent in the US macroeconomic environment. Although every individual has a guarantee on property rights, the bailouts that were clear during the economic crunch have raised eyebrows across the economic spheres Zengp.
The rationale is that the bailouts were perceived as a form of corruption that could undermine the integrity of institutions. This could worsen the economic recovery path. Zengp. Other regulatory frameworks and policies that have come up to aid the recovery of the economy have been counterproductive, us economy essay. Particularly, the procedures involved when starting a business have been effective after the us economy essay of over hundred regulations since the onset of financial crises.
However, the regulations have increased the operational costs of businesses that have continued to grow. The bureau also warns that a lack of adherence to the financial and monetary policies have led to price imbalances and distortions, us economy essay. These distortions predispose the economy to future and long-term inability to deal with inflation.
Further, the country has lost its competitive edge in the international markets. Visheshp. Although the effects of the policies are emerging gradually since their enactment, they are likely to heighten costs for us economy essay and further increase the unpredictability of the economy. Some economists argue that the fall of stocks in the US led to the crises in other parts of the world in addition to high rates of unemployment, us economy essay.
To illustrate the situation of in the US, us economy essay, it is important to analyze such factors as lowered rates of mortgages and high-risk practices by banks that exacerbated the financial situation Greenlaw et al. Banks allowed numerous mortgages without considering the ability of the debtors to us economy essay. Nonetheless, us economy essay, when the banks crashed, the rest of the economy felt the effects.
Bohnp, us economy essay. Bailouts became a norm, and the economy continued to plunge into recession. Indeed, the effects of the crises led to a negative growth of the economy in Visheshp. Unemployment rates began to soar since many companies were attempting to cut their labor costs while others liquidated.
However, the economy has attempted to keep the unemployment rates at their very minimum both in the short term and in the long term Cukiermanp. The federal government has instituted measures to curb rising government us economy essay. Besides, the policies target an increment in taxes and other tax reforms.
If the government does not rollback the policies and measures, the current economic growth looks sustainable in the long-term. The rationale is that the federal government will be in a position to balance the ratio of debt to gross domestic product. This implies that the country will still have to grapple with slow economic growth and relatively high levels of unemployment. The rationale for the prolonged and slowed economic is the effect of current policy that increases government spending on healthcare and pensions Greenlaw et al.
Despite the policies, the levels did not go down as the formulators had anticipated. Particularly, economists say that the measures did not capture the importance of stimulating the domestic economy to absorb unemployed citizens Cukiermanp. Further, the global business environment has presented the United States with momentous challenges. Many companies in the US have continued to source in countries where labor is cheap implying that they have headed east.
For instance, Apple has continued to assemble and manufacture chips in China and Asian countries where the cost of labor is substantially low than in the US. Second, Visheshp. The onset of the global crises saw many companies fail to meet their financial obligations. To remedy the situation, innumerable companies have continued to reduce labor costs as a measure of stabilizing their financial situations in the short term Visheshp. This is in terms of downsizing and job cuts.
The current policies have done little to reduce the high unemployment rates. The economic performance of the US remains bleak.
Coming out of the financial us economy essay economic crises, the country is facing a recession. Particularly, the passage of the bill to increase the national debt of the country was the first policy to enhance increased activities in the domestic economy. Nonetheless, government spending and debt lead to periods of slow economic growth. This implies that the policy was counterproductive. It did not take long therefore before the government instituted measures to decrease spending.
The USA seeks to decrease its spending and increase taxes in the next ten years, us economy essay. This us economy essay, the country will experience us economy essay macroeconomic environment due to the government spending on health and pensions.
To that end, the economy is headed for a long period of slowed economic activity typical of increased tax rates and reduced government spending. The interest rates have continued to be high due to the lending risks. Besides, the economic meltdown has also scared investors and bondholders who play a crucial role in ensuring the stability of the economy Cukiermanp.
Additionally, it is worth mentioning that the federal government was able to avert the impending tax cliff crises. Through sound policies and laws, the government has been on the forefront to agitate for reforms that do not only promise to end the recession but also increase the competitiveness of the economy at the global market Bohnp. Further, the government is yet to institute policies to stimulate the export function of the macroeconomic environment. Increasing the ability of the companies and organizations to produce for exports will decrease the imbalances that are apparent within the international trade.
Besides, it is almost impracticable to curb the unemployment rates and inflation when the imports are way above the exports. Although the recession in the economy will continue for the next couple of years, it is vital for the policymakers to come up with a policy that does not only increase the competitiveness of US economy but also boosts investor confidence Cukiermanp.
This way, the country is likely to shrug off the effects of the recent financial crises. In sum, the US economy is the biggest in the world considering its GDP.
Despite its stature in the world economy, the country has experienced a myriad of challenges since the onset of the financial crises of to High rates of unemployment that peaked in and decelerated economic growth have plunged the economy into a recession. The current GDP growth stands at 2. Various policies have come in place since the financial crises. They target tax reforms, high rates of unemployment and stimulation of exports.
However, some of the policies have been counterproductive. As such, there is the need to us economy essay other policies to cushion the economy from reduced spending amid rising tax rates. Cukierman, ACentral Bank Strategy, Credibility, us economy essay, and Independence: Theory and EvidenceMIT Press, Cambridge, Massachusetts.
Greenlaw, D. Monetary Policy Forum, vol. Debt Inviting Trouble? United States Economy. This paper was written and submitted to our database by a student to assist your with your own studies. You are free to use it to write your own assignment, however you must reference it properly.
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