This website uses cookies to ensure you have the best experience. Learn more

U.S. Economy Essay

994 words - 4 pages

The United States economy is currently not looking very good. Over the past couple of months the economy has taken a turn for the worst and we could be headed into a recession in the coming months or years. The biggest problems are in the real estate and mortgage markets. In 1999, housing prices rose at huge rates and lenders began offering riskier mortgages, which caused homeowners to keep piling up huge debts. People were taking out loans and balloon mortgage payments that they really could not afford. The problem began in late 2007, when housing prices began to fall and the system fell apart causing huge numbers of defaults on home loans and foreclosures. Currently, 5.6% of mortgages are delinquent, the highest rate in 21 years, and 2.5% of mortgages are in foreclosure, the highest rate ever (Fox 2). This has caused banks to lose huge amounts of money and as a result credit is becoming more difficult to get for consumers and businesses. With credit harder to get, consumers have cut back on their spending, which is very bad for the economy since around 72% of economic activity comes from consumers (Gross 2). Retail sales dropped .4% in December, which is disturbing because usually December is the biggest month for retailers. Other factors that show the economy is slipping are that inflation was at 4.1% in December and has steadily been rising (Fox 3). In 2007, food prices rose almost 5% and gas prices rose almost 30% from the year before. Unemployment rates also went up above 5% this month, which is the highest they have been in over 2 years (Fox 3-4). The GDP in the 4th quarter of 2007 also fell significantly from the quarter before. All of these signs and more indicate that the economy in the U.S. right now is not good and that a recession could be on the way.
It is not looking good for the economy right now in the U.S. The housing crisis that I mentioned earlier and resulting backlash through the entire economy has been building for awhile now but it has just came into the forefront in the past couple of weeks. We really haven’t faced a downturn like this since the Depression. Last Tuesday, January 22, the Dow Jones industrial average fell almost 600 points and was already down 9% in 2008 (Gross 1). Immediately the Federal Reserve took action and cut the interest rates three-quarters of a percentage point, the biggest cut in 24 years. Today, not even a week later, the Fed again cut interest rates, this time by a half-point (Aversa 1). This move is an effort to keep the economy out of a recession by getting money back into the banks and encouraging them to keep lending credit to turn the economy upward. Whether or not it will work remains to be seen in the coming months. The government also announced another move to a couple...

Find Another Essay On U.S. Economy

Macroeconomic Outlook of U.S. Economy Essay

2142 words - 9 pages Investment Analysis Macroeconomic outlook of U.S. economy For every four to six years U.S economy faces an economic slowdown. Thus the current market is now in forth year. The root of U.S. crisis and its economy can be traced backed to 2007, when U.S housing bubble burst which yields a financial meltdown in 2008. In average, the American trying to make ends meet in 2014, a market and a recession will probably look and feel the same. In early

The Current State of the U.S. Economy

632 words - 3 pages The Current State of the U.S. Economy The United States economy is racing ahead at dangerous speeds, and it may be too late to prevent the return of widespread inflation. Ideally the economy should move ahead gradually and grow at a steady manageable rate. Mae West once stated “Too much of a good thing can be wonderful” and it seems the U.S. Treasury Secretary agrees. The Secretary announced that due to our increasing surplus and booming

Outsourcing: The Demise of the U.S Economy

1493 words - 6 pages Outsourcing: The Demise of the U.S Economy As many people around the nation are aware of, the nine to ten percent unemployment hike in a span of just 3 years (Fig. 1 U.S Bureau of Labor) is just tearing the United States economy from the inside out. Millions of people in the once mighty U.S work force are now barely making ends meet and thousands more are fighting a losing battle to keep a roof over their heads as the growing unemployment rate

American Manufacturing and the U.S Economy

723 words - 3 pages For over half a century, American manufacturing has dominated the globe. During this period, many great American businesses and corporations began. Companies like General Motors, Levi, and Ford became widely known and promoted. American manufacturing became synonymous with quality, greatness, and reliability. However, manufacturing in the U.S has started to plummet as the economy has begun this recession. It may seem as if the

Japanese Automakers in the U.S. Economy

1334 words - 5 pages Japanese Automakers in the U.S. Economy Automobiles are the most frequently used form of transportation in the United States and much of the world. Owning a vehicle is almost a necessity in modern society. But when you go to buy a new vehicle, you are faced with the question "What should I buy?" Foreign, most popular being Honda, Toyota and Nissan. Or domestic like Ford, GM and Chrysler, also known as America's "Big

Current State of the U.S. Economy

1417 words - 6 pages , the largest one-month gain since the recession officially ended in November 2001. Unemployment has held steady at 6%. Economic growth leaped 7.2% in the third quarter, while worker productivity rose a remarkable 8.1%. The four-week moving average of initial applications for unemployment benefits dropped from 420,500 to 408,750. This improvement in the labor market could be an indication that the economy is strengthening. A recovery in the labor

The U.S. Dollar in a modern global economy

1156 words - 5 pages The U.S. Dollar - PAGE 1 - The U.S. Dollarin a Modern Global Economy(1)ECONYour UniversityThe 'Almighty Dollar'! Given the state of our current economy, that statement holds far less true than it did twenty, ten, or even five years ago. The dollar has slipped and slid and gradually fallen with consistency for the past five-plus years, save for a negligible stint of appreciation in 2005. The emergence of the 'global economy' in the late

The Positive Effects of Immigration on the U.S economy

1952 words - 8 pages . Not only does this This increase In GDP benefit the Native born workers It enables the market to be flexible, respond to consumer demands, and keep prices down. In fact it is estimated that the presence of immigrant workers in the labor market makes the U.S. economy (GDP) an estimated 11 percent larger ($1.6 trillion) each year.In conclusion immigrants contribute to the size and skillset of the U.S labor force, causing native born workers to be

DRUG TRAFFICKING ON THE U.S. ECONOMY AND SECURITY

959 words - 4 pages . “The illegal drug market in the United States is one of the most profitable in the world. As such, it attracts the most ruthless, sophisticated, and aggressive drug traffickers.” Throughout the years drug trafficking has been a major issue in America. These issues have impacted our economy, security, which promote new laws and policies throughout the U.S. and among our boarders. Drug Trafficking has created conflict with other countries such

The Euro And Its Impact On The U.S. Economy

1293 words - 5 pages The Euro and its Impact on the U.S. Economy The euro is the official currency of the following 12 European nations: Belgium, Germany, Greece, Spain, France, Luxembourg, Ireland, Italy, The Netherlands, Austria, Portugal, and Finland. Although it has been the official currency since January 1,1999 it became physical tender which can be used by all participating countries on January 1,2002. The introduction of the euro into the world was truly a

The Effects of Immigration In The U.S. Economy

3185 words - 13 pages out, it reflected the serious concerns of some Americans. During the 1870’s, the U.S. economy suffered a depression while that of Germany and United Kingdom improved. German and British immigration to the United States then decreased. Arrivals came from Norway, Sweden, Denmark, China, Canada, and southern and eastern Europe. In 1875, the United States passed its first restrictive immigration law. It prevented convicts and prostitutes from

Similar Essays

U.S Economy Essay

838 words - 3 pages U.S economy and congressTax occasion is not amusing, except you're an accountant observance a running tab of how a great deal you're billing clients. But this year tax terms even more upsetting than customary. You've been looking ahead to cashing in your share of the $3 trillion or so in tax cuts President George W. Bush has hard-pressed through in the past few years, those "actual and instant benefits to middle-income Americans" he's promised

U.S. Economy Essay

1116 words - 5 pages money longer. It’s not fair for the people to pay for the other people to live. Make jobs not excuses! Back in the great depression president Franklin D. Roosevelt toke this country out of the worst depression in U.S. history. What he did was create jobs for the people. Why can’t our president do that now? Making public work projects like creating buildings, ships, and dams will create jobs for a lot. Building and opening new schools, restaurants

War And U.S. Economy Essay

1019 words - 4 pages WAR and U.S. ECONOMYDuring time of war, the economy is expected to strengthen and grow, but under certain circumstances like the ones found in the United States, it can be a different story. There is no doubt that the war with Iraq will create an unstable economy in our country. Positively, a war will certainly encourage and demand many people with unused abilities back to work. I have found in the Gross Domestic Production (GDP) this can be

The U.S. Free Enterprise Economy Essay

790 words - 3 pages . People will also be affected, when you have less money you spend and buy less due to increased prices which can causes problems in the economy such as a recession or worse a depression. Budget Deficit calls for the government to let cost exceed national income and use of monetary policy to jump start the economy. The government must be careful when choosing the best way to build the economy up. If the policies fail, they can lead the nation into many problems as stated above. This is why regulating money, trade, and the economy is an important part in government tasks. In the end, citizens want the best policy to promote the U.S. into a stabile and secure economy.