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Positive Development of Economy

 

The economy has recently turned into a positive because the housing market crash in 2008 which made the whole economy crash. It wasn’t as severe as the great depression but it came close to it. A lot of people lost their homes and their retirement in 2008. It was a complete mess and when the Bush left the President to Obama it was the miracle he even survived out of it. Whether you are a fan of Obama or not he made the economy back on track and remember where the economy was before he came into office. There are a lot of factors to the economy but one major factor that weight the most, it is the job market. If the job force is full and has a low unemployment rate that means that economy is doing good and it continues to grow. In the opposite hand if there is a high unemployment rate and there are fewer jobs available that means that economy hasn’t recovered and it is not in a good shape. In order to help grow our economy, we have to expand our trade deals and make sure we bring manufacturing jobs in the United States of America. We cannot offshore our job to India because they are not contributing to our economy. If a person receives money in the US, he is going to spend money into our economy. If a person does not have a job, he is not going to contribute to the economy and he is going to collect the unemployment check. Another big push toward helping the economy is to push people out of food stamps and finding them jobs so they can support themselves and not wait for the government to give them a helping hand. If we decrease the money the government that giving away on food stamp we can use that money somewhere else in our economy. We got to cut on unnecessary things that are bad for our economy. We cannot wait for the government to come up with a solution because it will take them forever to make a decision. We have the decisions in our hand by creating our own business and don’t rely on other countries to produce our foods or whatever we need. If it is cheaper to buy it from other countries we should not buy it from them and stick with buying an American brand. Every label says that they are made in China. We have a trillion dollars defecate to China and we still buy their product. It is time to send a message to them that we can create stuff better than them and our quality will be better. It would be expensive in the short term but in the long term, it is going to benefit our company to make things nationally. It would be nice for a change for things to say that they are made locally in the good old United States of America, The greatest country in the world.

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U.S. Economy to fully recover by 2020

The great recession started nearly 10 years ago in 2008. During the end of the Bush Presidency, deregulation caught up with the market and the housing bubble burst. The burst began a chain reaction that ended in a global recession. Now, according to a recent publication from the Bureau of Labor Statistics, the U.S. economy may be on track to fully recover from the great recession by 2020.

Unemployment

Unemployment is at its lowest level in a decade. In 2009, at its peak, unemployment was 10%. In July 2017 unemployment stands at only 4.4%, well below the feds target of 6.9%. Unemployment benefits collected were below 300,000 for the 124th straight week. That’s the longest streak since the 1970’s and is a clear indication of a strong labor market. Tax cuts, infrastructure spending, and higher interest rates are musts for continued labor market growth.

Job Growth

Healthcare, hotel/restaurant, personal care, and social assistance sectors are expected to have the fastest job growth through 2020. 5.7 million jobs are expected to be added in healthcare alone. Education, retail, and miscellaneous services will collectively add over 5 million jobs. Housing is also on the brink of recovery and is expected to add 1.8 million jobs. By 2020 the BLS expects 20.5 million jobs to be added to the economy.

Interest Rates

By 2019 the fed will raise the interest rate to 3%. In 2018 after the fed raises the rate to 2% it has pledged to begin selling $4 trillion worth of U.S. Treasury Bonds it had acquired during quantitive easing which ended in 2014. Once that happens long term interest rates, such as fixed rate mortgages and corporate bonds, will be driven up.

Policy Effect

The outlook report from the BLS did not take into account President Trumps promises and policy changes. Tax and regulatory reform can drastically alter the outlook of the economy. With a lighter corporate tax rate and fewer regulations, businesses change how they hire, fire, and what investments they are willing to make. Corporations have a difficult time making long term investments when the future of tax rates and regulations are uncertain. A lack of investment can lead to stagnation in the economy.

Confidence in the Dollar

The confidence of the dollar fell to its lowest level since August of last year; $1 dollar is currently buying only 0.87 euros. The lowered confidence is a direct result of the latest healthcare bill’s failure in the Senate, which creates doubt around the President’s campaign promises and goals.