What is the current macroeconomic situation in the U.S - Essay Example

What is the current macroeconomics situation in the US? Task What is the Current Macroeconomic situation in the US Introduction This piece explains the current macroeconomic situation in USA with reference to suitable monetary and fiscal policies. “Data trends on unemployment, inflation, GDP growth, expansionary fiscal policy, FOMC” is equally evident in the piece (Papp 2009). Current macroeconomic situation in USA Presently, there exists a 12-18 months long budget process, which makes it complicated to make matches between the business cycle and already existing fiscal policies.

Consequently, a reduction in the interest charges of federal rates is evident. Further, there is a paralysis of all major trade markets in USA, which lessens the efficacy of the policy of reducing rates. In addition, the rate of credit flow has also decreased making the government have less power on the economy. According to (Papp 2009), the inflation levels of USA, as at February, this year was 2.9 percent. Variably, other indicators of inflation in a country; for example, consumer prices suggest that inflation is intense in USA.

The contemporary scenario involves the state buying goods products, which they need from the private market place. This poses a great setback on the GDP of America because of limitations, which arise from buying from the private market place only. Federal Open Market Committee (FOMC) is the dominant organization entrusted with making important decisions on the economy of the country. It is evident that the US government is concerned with the current rate of unemployment regardless of the witnessed drop.

Most economists are not sure whether the government has genuine concerns about the looming economic depression. Appropriate monetary and fiscal policies If seriously taken into consideration, the following policies can save the current economic situation in America. First, there should be motivation of the nation’s workforce productivity by reducing taxation. According to (Papp 2009), when there is a reduction or elimination of most taxation, the workforce will work harder and increase output for the nation.

Further, there should be a consideration of any taxation suggested before implementation in order to reduce the financial strain on employed citizens. Secondly, there should be a further reduction of interest rates charged on loans taken by citizens of USA. When this is tenable, there will be the elimination of any recession in the economy in good time and the state will have less setbacks. Consequently, credit and lending rates also need a reduction to address markets that decline to engage in business (Amonlirdviman, 2008).

Finally, there should be a controlled supply of monies in the economy because a surplus of money encourages inflation on an economy. In addition, there should be frequent checking of consumer demands in order to avoid cases of inflation. Consequently, government needs to diversify its buying pattern and include both the personal and public markets when buying (Hotte & Winer 2001). Conclusion The present policies on the macroeconomic situation in USA need to undergo better implementation. Further, there ought to be a reduction of interest and taxation rates so that citizens experience fewer strains on their finances.

Finally, the state ought to hire qualified professional economists who will aid in policy formulation. References Amonlirdviman, K. (2008). The economics of belief biases, life cycle saving, and portfolio choice. Princeton University Retrieved from http://search.proquest.com/docview/304499309?accountid=45049 Hotte, L., & Winer, S. L. (2001). Political influence, economic interests and endogenous tax structure in a computable equilibrium framework: With application to the united states, 1973 and 1983.

Public Choice, 109 (1-2), 69-69. Retrieved from http://search.proquest.com/docview/207160666?accountid=45049 Papp, T. K. (2009). Essays in the macroeconomics of frictional labor markets. Princeton University. Retrieved from http://search.proquest.com/docview/304982069?accountid=45049