Current Macroeconomic Situation in the US - Essay Example

Current Macroeconomic Situation in the US Affiliation Current Macroeconomic Situation in the US U.S is the heading economy of the globe but has had a recession since the 2008 financial crisis. Five years after this crisis, 63 percent of Americans feel that the economic system is no more secure than it was before the 2008 crash (OECD, 2013). Large percentage is of opinion that jobs and household incomes are yet to recover from the recession. And when asked about the effect of government efforts to handle the situation, majority believe the economic policies have just benefited corporations, the rich, and large banks than small businesses, the poor or middle-class (OECD,2013).

The government has pumped money into the economy to boost spending which in turn boosts the aggregate demand by increases it. This move aimed at providing citizens with more money to spend. It has also increased its spending to hike confidence about growth. The rescue of insurers and banks also helped to build confidence to public and businesses in the economy (Moore, 2014). On monetary front, FOMC has undertaken buying government securities in an attempt to reduce interest rates and encourage investing.

This increases the level of yield and betters confidence level. The government has tried its best to resurrect the U.S economy from the effects of 2008 crisis (Moore, 2014). According to Bureau of Economic Analysis, the GDP increased at an annual rate of 2.6% by fourth quarter of 2013 and in third quarter, it had increased by 4.1% (Pew Research, 2013). Real disposable personal income grew by 0.3 percent in February 2014 with a similar percentage increase recorded in January. As of September 2013, U.

S GDP was $15.7trillion-2.2 growth in 2012; Unemployment was at 7.2%, Inflation at 2.1%, and public debt at 106% of GDP (Pew Research, 2014). The GDP has increased overtime as the employment and inflation rates have declined. Unemployment has come down slowly but steadily but creation of more than 300,000 jobs per month is what is required to bring it down with the desired speed (Pew Research, 2014). To ensure a steady growth in U.S economy, political leaders need to ensure that there is no interruption in nominal functioning of government (Moore, 2014).

Changes are needed in budgetary procedures to curb such disruptions as government shutdown by abolition of nominal debt ceiling, to allow automatic authorization of resolutions passed by congress and borrowing implied by budgets. To give economic confidence a chance of entering positive territory, positive economic trends must continue. Government should increase money circulation in the economy to increase aggregate demand and reduce interest rates to encourage more investments. Doing so sees a decline in unemployment and GDP growth.

Moreover, most importantly, the federal government needs to control U.S debt and avoid events that damage morale like last year’s shutdown.ReferencesMoore, B. (2014, January 14). U.S. Economic Confidence Steady So Far in 2014. Gallup Economy, p. 1. OECD. (2013). General Assessment Of The Current Economic Situation. OECD Economic Outlook, 2, 1-90. Pew Research. (2013, september 12). Five Years after Market Crash, U.S. Economy Seen as ‘No More Secure’. Pew Research Centre For The People & The Press, pp. 1,2.