US economy state of affairs - Assignment Example

In recent months, there has been considerable discussion involving the of the national economy. Concern as to whether or not, the issues as oflate, will transverse into yet another quarter or fiscal year. The economic state of affairs hold a considerable weight for a nations overall strength and longevity. With the prospering of a nations economy, its citizens find themselves in position to posses great personal opportunities. Once that sure footing is lost, in such cases as job loss, then assurances of prosperity become few and far in between and as a result, individuals seek to question the unknown. As of late, the job market woes have become quite problematic, primarily for those individuals throughout the country, who have found themselves without work at some point or another. That being said, the unemployment numbers also become an issue for the very politicians that enact laws and control the flow of things, or at least claim to do so. Many states across the country are being victimized by high unemployment rates, such as California and are seeing those numbers translate into greater issues that leave even the states general budget vulnerable as well. To further elaborate the power of the US economy, The World Factbook found in conjunction with the website for the Central Intelligence Agency (CIA), seeks to do just that in outlining the general structure of the American economic system. “The US has the largest and most technologically powerful economy in the world, with a per capita GDP of $46,900. In this market-oriented economy, private individuals and business firms make most of the decisions, and the federal and state governments buy needed goods and services predominantly in the private marketplace,” (CIA, p.1, 2009). Individuals such as private citizens and businesses do in fact wield considerable power when it comes to showing the health, or lack thereof, when it comes to the state of the economy. When monetary woes are not a pressing issue, that in return gives way to the ability of those who desire, to spend more and accumulate more of what they may want, or need for that matter. Such spending is calculated and considered for means of looking at its benefit for monthly, quarterly and yearly economic reports. When times become tough, businesses see their ability to keep their production at current numbers become an issue and along with that, find themselves taking stock of output and facing the question as to whether or not they can maintain their present workforce at its present state. For the economy to perform poorly, there involves certain factors that would be required to be in place in order for it to happen in the place. Alarmingly, “Since 1975, practically all the gains in household income have gone to the top 20% of households,” (CIA, p.1). This figure would prove to be very disconcerting in that, whomever controls the most money, is enabled to place that back into the economic fold by means of purchase increases like housing and so forth. With only 20 percent of the American households controlling the vast majority of the wealth, then that in return, would leave the remaining 80 percent of individuals that would control the rest of the money pot. Another facilitator of considerable cash consumption, would be the American involvement in a prolonged military campaign in Iraq. During times to economic prosperity and peril, it remains up to congressional and executive responses, that seek to find solutions for positive outcomes. “The global economic downturn, the sub-prime mortgage crisis, investment bank failures, falling home prices, and tight credit pushed the United States into a recession by mid-2008,” (CIA, p.2). In observing this, it would only serve to reason, that Congress would be required to act as a result, so that the economic roller coaster would be potentially stabilized and in turn, put back into a more productive state. Congress set forth in the following manner, “To help stabilize financial markets, the US Congress established a $700 billion Troubled Asset Relief Program (TARP) in October 2008. The government used some of these funds to purchase equity in US banks and other industrial corporations,” (CIA, p.2). An action taken by the Federal Reserve, would be the decrease in interest rates. Credit interest rates would be lowered to such levels, that would enable businesses and private parties, to venture into the credit markets again by increasing purchases of goods and/or services rendered. By the government taking the action it did, it was intended for these banks who received the relief money, to in turn, be able to generate more business through the acceptance of new credit applications. Attempting to gauge the economic future of the United States can and often times is, quite a daunting task. Economic resources of the past, have shown that over time, the American economy has been known to hold considerable power over its neighbors but to also shift on its own as well. During the later course of President Clintons administration, his government would see an economic surplus. That much can easily change, as it did when the nation entered into the 21st century. Economic surpluses can easily shift into economic downturns that result in high unemployment rates and risks of rising inflation. Hundreds of thousands of individuals forced to sit on the unemployment line, in the hopes of obtaining work that would enable them to return to the regular working world. As to whether or not the US economy would recover from its present state of affairs, it most likely will. The real question, instead of being if it will, in reality becomes a greater question of when it will. Many economic strategists have made known their opinions on national television, when it comes to determining that very thing. Some seek to say that the economy has in fact turned around, while others beg to differ and say that the time for that, has not yet come. The only uniform opinion, would be that the economic woes of the nation, to whatever degree, are in fact very real. While it may find itself prospering once again, it very well may never be at the levels at which it was even a decade ago. The most important thing becomes then, that the American economy be given the necessary tools to heal itself so that many more generations prosper. In the days and weeks ahead, many will still feel the considerable strain of concern over where the economy is heading. As time goes on, more and more, individuals will be brought back into the work force and given the chance to regain some semblance of their previous lives. With it being the end of 2009, it becomes quite possible that such advances towards economic solvency, may not begin to show, until more into 2010. That being said, it may very well take longer than the next calendar year to regain a glimpse of economic strength. The primary concern of all becomes not the question as to how long it would take, but if it was desired. The answer as to whether it was wanted, would surely be yes. References Central Intelligence Agency. The World Factbook- North America: United States. Retrieved November 29, 2009 from https://www.cia.gov/library/publications/the-world- factbook/geos/us.html Read More