Current Macroeconomic Situation in the U.S.

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Contents

Introduction1

Discussion1

Current Macroeconomic Condition of America1

Unemployment2

Inflation3

Monetary and Fiscal Policies3

Conclusion4

References5

Current Macroeconomic Situation in the U.S.

Introduction

Sivy (2012) comments that America is still in the phase to recover from the 2007-2009 recession, which not only caused financial crisis on the global scale but is also termed as the worst economic period in history of America, even more worse than the great depression of the 1940's. After 2009, the American economy is on road of slow recovery, with annual growth rate averaging about 2.2% annually. However, conflict exits on front of the future progress and health of the economy in the upcoming years. Likewise, the second half of 2012 saw improvement in the growth rate of the economy compared to its first half. Nonetheless, it is predicted that in 2013, American economy faces the threat of having a continued high unemployment rate of over 8%, a below average growth and a threat of double-dip recession.

This paper aims to address such macroeconomic issues facing the American economy and discuss the likely monetary and fiscal policy measures the government could undertake to improve the situation of the economy.

Discussion

Current Macroeconomic Condition of America

Root (2012) opines that because of many structural, social, economic and other political obligations have made the present economic crisis worse in reality compared to the great depression of the mid 1900's. This has been because today many states are bankrupt and rely on federal government bailouts to survive. This has in return have also severely impacted the provision of economic crisis in these states as well. Today, America stands at over sixteen trillion dollars in debt, including one hundred trillion dollars in unfunded liabilities. This per average makes up to over three hundred and sixty thousand dollars in debt spread over to each American citizen. In addition, the government funded schemes such as Medicaid, Medicare and social security did not existed in the early 1900's, hence, considering such important factors it can be justified that the present economic crisis in America is certainly worse than any recession experienced by the country previously.

The primary macroeconomic concerns of any country include its inflationary status, unemployment level and its economic growth. Presently, American economy is in such a state that it is concerned with improving all its macroeconomic functions together, instead of focusing in an individual function holistically. As discussed above, the economic growth of America is stagnant and increasing at a ...