ECONOMIC PROBLEMS

Economic Problems in the United States

ABSTRACT

The economy of the United States is one of the largest and most technologically powerful in the world with the per capita GDP of $ 36,300. However, the American economy remains competitive throughout the centuries but it has faced many economic problems of Unemployment, Inflation, Poverty and other economic problems. In the market economy, individual enterprises and private businesses are responsible for most of the decisions while federal and state governments buy needed goods and services primarily in the private market.

TABLE OF CONTENTS

ABSTRACTii

CHAPTER 1: INTRODUCTION1

Research Background1

Research Aims and Objectives2

CHAPTER 2: LITERATURE REVIEW3

Overview of Current issues in the U.S. Economy3

Economic Problem in the United States4

Trade Deficit in Economy7

Debt Problem in Economy8

Problem of Unemployment8

Problem of Health care in the economy9

The Ripple Effects9

CHAPTER 3: METHODOLOGY11

CHAPTER 4: ANALYSIS12

CHAPTER 5: CONCLUSION18

REFERENCES19

CHAPTER 1: INTRODUCTION

Research Background

The U.S. is beset by weak economic growth, ballooning debt and stubbornly high unemployment but the collapse of the housing bubble that spurred the 2008-2009 global financial crisis was more a consequence than a cause of what is wrong. The real culprit was and remains poor policymaking in the areas of taxation, finance and economics, which helped bring on the crisis by encouraging Americans to engage in counterproductive behavior. Without meaningful fiscal reform, the U.S. risks joining the PIIGS - Portugal, Ireland, Italy, Greece and Spain - on the road to ruin through unsustainable debt, high spending and chronically low growth. It was not supposed to have happened this way. The great recession that lasted for a bit more than one year, from 2008 to 2009, was supposed to end with a sharp recovery. History tells us that the sharper the downturn the shaper the recovery. The latest data released by the US Commerce Department on the rates of growth in the country's economy paints a very different picture. It turns out that the recession was deeper than the earlier estimates.

According to the revised national income accounts produced by the US government going back to 2003, the downturn during the great recession was much deeper than previously thought - in other words, the great recession was even greater. The Commerce Department said that the economy contracted by 5.1 per cent between the fourth quarter of 2007 and the second quarter of 2009. The earlier estimate was 4.1 per cent. Under the revised data, the US economy declined by 0.3 per cent in 2008, lower than the previous estimate of no growth. The contraction in 2009 of 3.5 per cent was weaker than the previous calculation of 2.6 per cent. The economy grew a little faster in 2010, rising at 3.0 per cent rather than at 2.9 per cent thought previously. The recovery has been even slower. The Commerce Department has revised the GDP (gross domestic product) growth estimates for the first two quarters of 2011. America's GDP grew at an annual rate of less than one per cent in the first half of 2011. The pickup in the rate of growth is much slower than ...