Analysis of US Economy 2009-2019
Is the US economy booming as some economist suggests? 2008-09 in United states the GDP growth rate (GDP growth rate indicates how fast or slow the economy is growing or shrinking.) was consistently poor but since then US economic policies seem to be taken effect; Economy had been expanding and breaking by 2% average growth rate to 4.1% in 2018 and in 2019 it rose down to 3.1% at the early quarter to 2% average, some economist agree that the ideal growth rate should follow 3% to sustain unemployment rate.
If we go through an early expansion period review records of 1991-2001 which held increased GDP of 43% and from 2009-2019 it grew just 22% as per Bloomberg records, national income has fallen from 68.9% to 66.4% over the period, Growth output for each person employed or another measure of labour efficiency has declined, President Trump boasted that during his presidency economy will boost to at least 4%, 5% to 6% maybe and it did well at his early presidency period but lasted at 3.4% which was likely because of tax cut rush, Trump’s policies gained tensions for the US which led them trade war with China and Mexico his Islamophobic discriminatory remarks got alert from Islamic countries which have very likely to effect in productivity and output over the country arising conflict between communities.
Let’s see and discuss this in three distinct stages, “early, present and later stages”
After the great recession, the United States government spent their most time on fast recovering their economic crisis which had now all the features of secular stagnation till now due to the rate of growth by 2% average at most.
Here are the bounds which led to their demise:
- Subprime mortgage crisis, the commerce department warned that the new home permits were lower than before and the Bush government didn’t realize early signs.
- Low-interest rates followed suit borrowers defaulted their loans, home prices fell.
- Credit default swaps (CDS) were banks felt safe against defaulters but mortgage back security (MBS) market got buried as insurers did not have enough capital to cover for their loss.
- Stock market crashed in 2008 worsening the situation for the capitalist, etc.
During this crisis, Obama took the office improving the whole structure of the economy where 23% of American citizens said they are experiencing far better financial shift over the course. In 2016, over four in 10 citizens said so. Which was one of the positive comebacks towards any government.
The US government acted signing the Trouble Asset Relief Program of 2008 rescuing financial structure as well many acts signed by the government. i.e. 2009 Recover & Reinvestment Act, 2010 Tax Relief of Job creation Act.
Republicans shook America bringing Trump leading him to control fiscal stimulus in the country, Trump displayed them his vision of shaping America’s economy to soar and committed that he will lead America to its greatest potential.
Trump’s policy did bring them conclusive results nevertheless pocket-sized. Trump’s Council of Economic Adviser, Kevin Hayst, says that the corporate tax relief elevated invest on plants, equipment and software onto a greater path.
last May IHS Markit’s US manufacturing purchasing manager Index fell to two-point as per data the overall index fell by almost six-point.
One of the prominent economist Chris Williamson, “US saw manufacturers undergo the toughest month for all most 10 years, with the headline PMI down to its lowest since the height of the global financial crisis”
Trump’s continuous lie succumbed him to impeachment, as we all know public hearing may take place and if there are a ‘Guinness book records’ for the biggest liar in history Trump would be the first one on that top list
Let’s go through some details of his performance on the American economy:
- The US president claims in United nation last year that their economy is soaring high and is it really as he claims? no, because if we through GDP expansion rate and see its statistics released by the economic bureau in Trump’s government the early expansion GDP 3.1% on its first quarter wherein 3rd quarter considered lower to 2.1% which is very less what Obama government achieved where GDP roused up 5.5% achieved in the second quarter of 2014.
- Corporate tax-cut did help the stock market to rise with the US fixate policies which even Trump’s supporters argue.
- Unemployment rate was at 3.5% in November which was quite low in 50 years, In August Real disposable income was at 0.6% later it went down to -0.2 last year which also brought less consumer spending.
- This year attack on Iranian general caused oil prices to jump as Dow industrials falter which has raised tensions between these two countries.
Calculating these data, we can hypothesis that what might future bring especially if war erupts it will also impact greatly onto the US economy and religious conflict would arise and productivity too will fall.
In the latest views of the trade war were Trump announced that he will sign a phase one trade deal between the US and China which will be his first step forward their truce to end trade war between two superpowers, The Delegates will come to Washington white house and sign later Trump also announced that he will visit Beijing, China for the second phase trade deal literally in his tweet he said that he will talk about it and still not confirmed of his bilateral talk.
The US government will likely avoid a recession by trying to increase household spending but it will still not be enough for them to deal with this crisis, As climate change will without a doubt affect the economy as federal reserve warned them that climate change will forcibly lead them to bankruptcy as they must be wary and take appropriate measure to ensure the balance.