The Federal government expenditure is believed to boost economic growth a, although state and local governments are believed to deplete the economy in general as they concentrate on cutting down their budgets in the midst of diminishing tax revenue. Their expenditure fell at a rate of 3. 8% annually, and analysts anticipate this trend of contracting both the state and local budgets to go on. According to Irwin (2010) another negative mark for slower economic recovery for the remaining part of the year is said to be trade which is at the present stand-in as a mild drain on U. S. economic growth.
In the first quarter of the year, exports and imports scaled up, as global trade unrelentingly bounced back after the economic crisis that hit the global market, although imports increased more rapidly, as net exports drained about 0. 6% from GDP growth. Reforms that the US economy needs There are many reforms that US economy needs to recover but the key one is to restructure in order to recover, for example building credible programs for effective environmental control like extending unemployment insurance (Colombant, 2010).
There should be creation of more jobs to cut down the continuing high unemployment rate. This could snap back the economy into the shape that it was in before the financial meltdown of 2008. The Federal Reserve should initiate sound financial regulatory reforms that will boost economic growth like the Federal Deposit Insurance Corporation (FDIC) should create a feeling of security among depositors, while Securities and Exchange Commission (SEC) give stockholders latest information upon which stock to base their investment decisions.
Federal Housing Administration (FHA) should provide more safety to lenders as well as new mortgage terms for home buyers, if all this is well implemented, then market is likely to attract more investors. The restructuring of economy is and will be painful, thus Americans patience for change is called upon as it was during the Great Depression.
Birkner, C. (6 June, 2010). Economic Recovery: Are We There Yet? Future Mag. com. Retrieved On 22/08/2010, from: http://www. futuresmag. com/Issues/2010/July-2010/Pages/Economic-recovery Are-we-there-yet.aspx Colombant, N. (24 July, 2010). Obama Attacks Republican Economic Proposal.
VoaNews. com. Retrieved on 23/08/2010, from: http://www1. voanews. com/english/news/usa/Obama-Financial-Reform-Law-Key-To-Economic-Recovery-99166124. html Irwin, N. (1 May, 2010). U. S. recovery continues at its slow pace, GDP and other data show. The Washington Post. Retrieved on 23/08/2010, from: http://www. washingtonpost. com/wp-dyn/content/article/2010/04/30/AR2010043001041. html OECD (2008). OECD Economic Outlook: June No. 83 – Volume 2008 Issue 1