Please boost your Plan to download papers
Term Paper example - Describe 4 major problems faced by the US economy currently based on current media reports
Macro & Microeconomics
Pages 5 (1255 words)
The economy of United States of America was performing very well at the start of the century but then went under deep recession in the year 2008 with the credit crunch and all the financial institutions seem to crumble at the same time. People started to default, and the society…
Extract of sample
The issue started with the debt crisis when the borrowers were unable to service their loans and thus faced difficulty in paying back the loans. This resulted in the housing market crisis when people ended up with bad loans which in turn resulted in people being deprived off their homes. The credit crunch also led to damage to investors confidence and investors and savers were unwilling to inject the money into the economy which resulted in shortage of money and cash, and this also resulted in the rise of unemployment.
Since the financial crisis struck in the year 2008, the US debt has been very high. According to a recent news article, the United States debt is nearly as much as the total value of all its goods and services produced in the US during the financial year. CNBC reports that the total value of the US debt is $14.96 trillion which means that the United States external debt as a percentage of its GDP stand at 99.46% (CNBC). This is a very high figure and indeed a very dangerous one because high leverage of debt can be very risky. As a matter of fact, it is suggested that every person born in the United States has a debt of $47,664 in the very second it is born. The figure on the left shows that the public debt in the US will surpass the 17 trillion mark by the end of 2012, and indicates how the debts are constantly on the rise, which can be a very alarming situation for the people. (US Government Spending)
Not just the rising debts, but the economy also faces the difficulty of constant budget deficits which means the outlay of the United States government is greater than the receipts and this means that the US government has to search for sources to raise the finances. Since the past three years, the US federal deficit has been around the $1300 billion mark. (US Government Spending)
As mentioned above, United States economy has become ...
Not exactly what