The US Economy over the Last Three YearsIntroductionThe U. S. Federal Government, if looked through an economist’s spectacles, is at a stand still right now. With the most topical matters on Capitol Hill with the banks going under and financial constancy non existent, the federal government does not even know which direction to go. The Federal Government is the authority and power. The Federal Government adapting a check and balances method to allocate and adjust issues as it recounts to the U. S. Constitution. The Federal Government depends on the world to function correctly so that the efforts on their part can operate efficiently for everyone.
At this point in our economic times the Federal Government is operating poorly economically, socially, and is on the recovery side politically, with our new administration President Barrack Obama, and because of this, the United States is at the worst financial situation is has faced in a long time, but a change is coming. (Torbat, 2008, 10-13)In the 1929, the United States of America was hit by the biggest depression in history. The Great Depression not only affected Americans, but the nations who relied on our exports and traded with the United States.
The stock market crash of October 1929, or “Black Tuesday, ” was considered the beginning of the Great Depression. However, the stock market crash was not the only cause of the depression. Many other events led to the Great Depression: the European country’s inability to pay off their war debts led to the United States lessening their foreign trade. Additionally, speculation in real estate and stocks caused prices to rise out of control. The overproduction of materials and unemployment were another cause that was a result from machines replacing them.
Banks also gave too much credit to people that were not able to pay off their loans (Economist 2007, p. 4). Why does this sound so familiar, because we are in the mist of the Great Depression all over again? The Federal Government has managed to repeat the same exact issues that existed eighty years ago. The stock market is experiencing a different company crashing, or going out of business, on news broadcast each day.
There is some company claiming bankruptcy, selling out, or just closing their doors. US Economy and War on TerrorThe Iraq War led the United States to not be able to pay off its debt to all the involved parties in the war, which includes the foreign government troops and foreign support in the effort of the war. Additionally, the real estate market crashed due to the financial institutions that have no money to lend to people for homes and other investments. In our marketplace, companies are overstocked in some industries and under stocked in others.
Industries rely on each other to produce, and supply for the demand. When the demand is down, but the supply is still there what will happen to the goods and services. Then if the supply is low and the demand is low, people are fired, companies go out of business and the unemployment worker rate gets higher. Since there is no demand for what use to be supplied to industries unemployment is at an all time high.