Economic Pain In The US Economy
Dr Surendra Bhakta Pradhanang
March 10, 2008
America is the richest country in the world whose economy can not be weakened. The US government is very rich and responsive – responsible to the people and country – in the glove. Today the nation´s economy is almost in the stage of recession – in fear of stagflation - during this period of time.
The United States facing economically stressed is on the brink of a recession- the biggest job loss in five years, the rise of price level of daily consumption goods and services and increase in gasoline price.
The short term or bubble economy growing in the US economy affects the nation temporarily. ` Short – term gain could yield long – term pain´. For example, a stock- market bubble, a real – estate bubble, a super low interest rate and a series of short-term stimulus packages solved nothing in reality.
Economy is the top concern in the nation. Cutting tax along with less regulation and less government spending to stimulate the economy, which is good when consumers spend in America while the government spends people´s money, the situation then may be different and unright
A worsening of Iraq war or a national security crisis can upset the national economy as a whole. The people of the United States think the state of recession and rise in price level is mainly because of Iraq war and heavy expenditure cost.
Some economists believe including Fed officials that a return of 1970s stagflation coming back with stagnant growth and inflation in the country. Historically speaking, recession and inflation can not go together at the same time.
As the Commerce Department reported the price index of personal consumption expenditures rose 3.7 percent in January from a year earlier. It is more worrisome that some core inflation sign and symptom showed.Basically, the food and energy increased or accelerated to 2.2 percent in January from 1.9 percent in August.
In core inflation, higher energy cells have passed through to other goods and services. Core inflation rose and fell with energy and food prices stop rising – recession and inflation can not be happened so far.
The National statistics reveals hourly wages and benefits were 3 percent from a year earlier; a slowdown from 2006.The unemployment now 4.9 percent rises to 5.25 percent by 2010.The version is that higher unemployment reduces inflation in practice. The past record shows inflation did fall after the recessions of 1969-70, 1973-75 and 1980.Once inflation situation or inflationary gap happened, it will be very costly to the national economy for being normalization.
The Labor Department exhibited the data that employers shed 63,000 jobs in the month of February in comparison to the previous five years. Likewise, private sector jobs fell by 101,000 too.
But Edward Lazear, Chairperson of President´s Council of Economic Advisers differentially remarked that there is still not a recession, but cannot be denied a less strong economy in the USA. President Bush also said in the meeting at the White House," I know this is a difficult time for our economy, but we recognized the problem early and provided the economy with a booster shot." He claimed the US economy is not in recession at all, but in the stage of slowdown or turndown.
There is a controversial opinion in the present US economy. But the reality cannot be hidden nor escaped before the timely hours. Today the national economy is not favorable position. As for illustration, manufacturing sector lost 52,000 jobs, construction payrolls fell 39, 000, retail enterprises decreased 34,000 jobs – temporary jobs. The barometer of trading concerns hiring requirements lost by 28,000.The economy grew to downturn in the nation.
The National Bureau of Economic Research has to think and alert on the recession of national economy. Meanwhile, Harvard based economist Benjamin Friedman involved in the group´s Business Cycle Dating Committee for 15 years including 1950-91 also said that recent national data show a picture of economic downturn leading to recession.
Hence, the US government and responsible economists, planners and advisers have to timely think of the means of recovery into consideration before worsening the national economy. Urgently, millions of new jobs with handsome wages should be chased soon by investing and reinvesting in necessary focused infrastructure, energy and market economy. The US economic pain should be erased in the national economy as early as today.
The United States facing economically stressed is on the brink of a recession- the biggest job loss in five years, the rise of price level of daily consumption goods and services and increase in gasoline price.
The short term or bubble economy growing in the US economy affects the nation temporarily. ` Short – term gain could yield long – term pain´. For example, a stock- market bubble, a real – estate bubble, a super low interest rate and a series of short-term stimulus packages solved nothing in reality.
Economy is the top concern in the nation. Cutting tax along with less regulation and less government spending to stimulate the economy, which is good when consumers spend in America while the government spends people´s money, the situation then may be different and unright
A worsening of Iraq war or a national security crisis can upset the national economy as a whole. The people of the United States think the state of recession and rise in price level is mainly because of Iraq war and heavy expenditure cost.
Some economists believe including Fed officials that a return of 1970s stagflation coming back with stagnant growth and inflation in the country. Historically speaking, recession and inflation can not go together at the same time.
As the Commerce Department reported the price index of personal consumption expenditures rose 3.7 percent in January from a year earlier. It is more worrisome that some core inflation sign and symptom showed.Basically, the food and energy increased or accelerated to 2.2 percent in January from 1.9 percent in August.
In core inflation, higher energy cells have passed through to other goods and services. Core inflation rose and fell with energy and food prices stop rising – recession and inflation can not be happened so far.
The National statistics reveals hourly wages and benefits were 3 percent from a year earlier; a slowdown from 2006.The unemployment now 4.9 percent rises to 5.25 percent by 2010.The version is that higher unemployment reduces inflation in practice. The past record shows inflation did fall after the recessions of 1969-70, 1973-75 and 1980.Once inflation situation or inflationary gap happened, it will be very costly to the national economy for being normalization.
The Labor Department exhibited the data that employers shed 63,000 jobs in the month of February in comparison to the previous five years. Likewise, private sector jobs fell by 101,000 too.
But Edward Lazear, Chairperson of President´s Council of Economic Advisers differentially remarked that there is still not a recession, but cannot be denied a less strong economy in the USA. President Bush also said in the meeting at the White House," I know this is a difficult time for our economy, but we recognized the problem early and provided the economy with a booster shot." He claimed the US economy is not in recession at all, but in the stage of slowdown or turndown.
There is a controversial opinion in the present US economy. But the reality cannot be hidden nor escaped before the timely hours. Today the national economy is not favorable position. As for illustration, manufacturing sector lost 52,000 jobs, construction payrolls fell 39, 000, retail enterprises decreased 34,000 jobs – temporary jobs. The barometer of trading concerns hiring requirements lost by 28,000.The economy grew to downturn in the nation.
The National Bureau of Economic Research has to think and alert on the recession of national economy. Meanwhile, Harvard based economist Benjamin Friedman involved in the group´s Business Cycle Dating Committee for 15 years including 1950-91 also said that recent national data show a picture of economic downturn leading to recession.
Hence, the US government and responsible economists, planners and advisers have to timely think of the means of recovery into consideration before worsening the national economy. Urgently, millions of new jobs with handsome wages should be chased soon by investing and reinvesting in necessary focused infrastructure, energy and market economy. The US economic pain should be erased in the national economy as early as today.