¶ … U.S. Economy
Evaluating the current state of the United States economy
Although many are of the opinion that the recession that the globe was forced into in 2008 is finally uplifting and signs of economic revival can be witnessed. The resulting high levels of debt and unemployment from the recession had dragged many countries, especially the United States in to a state of economic turmoil. In order to reverse the effect of such factors, the United States government has implemented strategic monetary and fiscal policies. These policies attempt to rejuvenate the economic position of the country by not only controlling the supply and demand via tax cuts but also through re-setting the interest rate level in accordance to the low level of disposable income available to the unemployed / lowly employed citizens of the United States can acquire loans to allow easy spending and repayment of the loan as well.
Introduction
During the financial crisis of 2008, the economy of the United States of America witnessed many economic problems. A huge number of people belonging to the national workforce were made redundant, businesses collapsed in the country and high living costs made it difficult for the people of America to be able to sustain on lower incomes. The biggest problem the financial crisis brought for the people was the rise in debt for them during times they found it difficult to pay it off.
Now, the economy of the United States of America has improved comparatively to the pre-2009 period. This has been due to the economic policies, mostly involving the fiscal and monetary policies that the United States government has brought in place and action to act as a remedy for the prevalent economic problem. However, although the economy has improved the financial crisis, it cannot be said that it has made complete recovery and is booming in the current time.
The strategic implementations of the economic policies by the United States government undoubtedly aided in the recovery of the economy, but these cannot be assessed properly unless the results are compared with the pre-financial crisis period. The evidence that these policies have benefitted the country and its population with complete efficiency needs to be analyzed with the help of various economic factors. Using such analysis will aid in developing any suggestions that can be made to further develop more efficient economic policies.
Unemployment
The foremost economic factor that would be taken into consideration to evaluate the current state of the United States economy is the unemployment factor. Unemployment is such an economic factor that is affected by various other factors prevailing in the economy. Technology is one of the factors that have an impact on the unemployment rate. Due to its nature to be able to perform human tasks with more speed, care and precision, technology and machines continue to impact the employment of the working force. The more the technology becomes advanced, the higher the automation of businesses occurs and thus, more people are rendered jobless. Similar has been the case in the United States. The demographic factor also is key contributor to the unemployment rate. As the level of education increases through the country, the labor force decreases and people target jobs according to their qualifications. This increases the number of educated and qualified people after fewer active and available jobs. This has the same impact on the employment rate in the United States.
According to statistics, from 2003 to 2007, the unemployment rate had been decreasing steadily and arrived to its lowest point of 4.4% by the start of 2007. Then eventually the financial crisis began and thus, businesses began to cut costs by eliminating any employment costs that they could decrease. From 2008 to 2010, the unemployment rate shot up dramatically from 4.9% to 9.9% (Labor, 2013). The introduction of the American Recovery and Reinvestment Act by the President Barack Obama led government targeted to fund the economy with an approximate $800 billion in the form of tax cuts and government spending on public benefits (CBO, 2012). The Act proved to be successful for its purpose, as employment rate since then has been steadily decreasing and from the highest point of 10% in 2009, the current rate in May 2013 has fallen to 7.6% (Labor, 2013).
As a person would be unemployed, he or she would have access to a lower disposable income. This will force them to control the spending and thus result in a decrease of their demand. This cumulative decrease in...
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