3 June, 2011. Effects of Economic Recession on American Jobs: Officially, recession in US commenced in December, 2007. Recession can be defined particularly as the decline of Gross Domestic Product (GDP) in three successive quarters…
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This was the most severe form of economic recession that US had experienced in decades. A vast majority of industries in US were affected by this economic recession. US could not find any way to escape the economic recession when the whole world had actually completely soaked in it. The circumstances took a fortunate turn in the last three months of 2009, and the economy began to grow and become strong, though the graph soon took a downward turn specifically in the later half of 2010 when the growth of GDP in US fell to 2 per cent. “The federal stimulus money that has added at least 1% but likely 2% or more to the GDP growth will be winding down and that could put at least as much of a drag on the economy as the boost it gave” (Hall). When the recession was at its apogee, the years were full of pain for a lot of Americans because they had lost jobs. According to an estimate, as many as three quarters of a million jobs were being lost on a monthly basis in US in the years of recession (Bureau of Labor Statistics”). The rate of unemployment in US reached 10.2 per cent by October, 2009. Since then, it has shown a slight decline and has reached 10 per cent. Before stabilizing, the unemployment rate in US is expected to go up till the end of 2011. A loop of negative feedback was introduced by the economic recession which is expected to keep dragging the US economy for a while in the near future despite the fact that the economic recession has largely declined. Some of the components of this loop are high rate of unemployment, inability of the unemployed to pay their mortgages and bills, and weakened wealth from loss of equity. People in US are suffering from lack of income. Their lowered financial status is causing them to save more and spend less. Owing to the tightness of the credit, people in US are finding it hard to purchase homes or establish new businesses. As a result of the declined consumer spending, businesses have lowered their production in an attempt to improve their efficiency. A lot of companies in US have downsized in the past two to three years and the rate of recruitment has declined accordingly. US government has shown a similar trend. The value of property has steadily gone down along with the property tax revenues. Accordingly, the sales have been lowered together with the sales tax revenues. Owing to the lowered incomes, and a lot of losses, income taxes have been lowered. On the other hand, US government is spending much more than ever before in order to cater for the needs of the unemployed. This has caused the US government to increase the payable fees as well as cut back services. As a result of this, governmental contracts and government employees have reduced in number. The Federal governments have plunged into the scenario in a very aggressive manner with a view to distorting the loop of negative feedback. The Federal governments aimed at minimizing the downfall of the global economy so that the loop of negative feedback would be reversed. However, as a consequence of the massive spending and increased involvement in economy, the US government now feels the need to retract itself so that the debt that has thus been incurred could be paid back. This can be easily achieved by if the US economy continues to grow like it did grow by 5 to 8 per cent after the end of economic recession. However, it is important to realize that the recovery of economy is not occurring in a
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Today, unemployment is one of the leading economic challenges facing the United States of America. It has far-reaching impacts on the individual, society and the country’s economic growth. Definition and types of unemployment Unemployment refers to the situation of lack of gainful work engagements usually for a long period.
The crisis not only affected people in the United States, but was felt by people all over the world. The interview I conducted revealed people’s feelings about the crisis and it showed how people reacted to the crisis by cutting down their budgets (Jickling).
Outsourcing is heavily being employed in America nowadays and has potential implications on the US economy. A vast majority of the items contained in the home of an American have been imported from other countries, thus causing many countries to experience economic boom along with an equivalent decline in the strength of the US economy.
Primarily the focus is stressed on the proximate causes that ignited and spurred up the economic downturn. In the subsequent step, endeavors made by the US government in the stabilizing mechanism of the economy is explained with particular emphasis on the role of President, Congress, Secretary of the State, and Treasury Secretary in order to abolish the adverse consequences on the economy.
Also, economists forecasted that the contraction is not permanent; however, the abrupt shifting has worsened the EU recession (Pylas & Rising, 2013). In world market, this may result to the withdrawal of investments and collapse in confidence. For instance, countries worldwide may withdraw their investments in Germany, as they believed that the latter’s economic frame is unstable, and would just compromise their own problem.
On the contrary, to say that the middle class is the ruling class would be a great misconception. They define the typical American family and the typical American worker. The middle class represent the very foundation of what the nation is. Within the middle class there tends to be a range of classes from upper middle class to lower middle class.
Lastly this paper will conduct an evaluation where I will highlight my opinion on the matter as well as theorize on how the downturn has affected other economies in general terms.
It is important to highlight that this paper will be focused on how the downturn in
Then the focus is shifted towards the factors affecting the US economy. The next segment deals with the steps taken by the US administration. Special focus has been provided on the role of President, Congress, Secretary of the State, and Treasury Secretary