The lost US decade
The newly graduated young adults of 2001 in US faced a combination of shock and disappointment, as, opposed to their confidence in the American job market, there had been steep competition for entry level jobs in face of pay freezes and lay-offs at earlier and more dangerous points.
Analysts term the past decade of recession as a lost decade for the US, where the government and the economists have not been able to find real solutions to persistent economic problems. In the last 10 years, only those were able to live the American dream who decided to become their own bosses or worked at places like hedge funds which gamble on falling markets by short-selling and volatility is actually good for their business.
The past decade has remained important because of rising joblessness. The IMF found both the recessions of 2001 and 2008 as the worst among the past ten US recessions. These findings were based on the key measures of loss of output, employment, investment and growth in personal disposable income.
The official GDP numbers show a peak to trough trend, as thorough revisions revealed that the downturn has been much deeper than previously assumed. It involved a 5.1 percent fall in national output, making the real recovery appear somewhat weaker. Also, the national income has not been retained to its pre-crisis prosperity. Analysts hold the dot-com bubble crash, the 9/ 11 World Trade Centre attacks, the U. S. housing bubble crash and the recession of 2007 as the building blocks for the failure of past decade in the economic history of US.
The fiscal response to the crisis in the US has been much more dramatic, with consumer spending rising by 4.4 percent in the final quarter of 2010 on one hand. It makes up about two-thirds of the economic activity. While on the other hand the unemployment woes have remained tragic for millions are still out of work and the unemployment rate has been stuck above 9 percent since 2009. Economists say the economy needs to expand by at least 3 percent over several quarters to alleviate unemployment, it expanded by 2.9 percent in 2010 as a whole.
Such figures show moderate signs of recovery and may lead to a steady growth in the US economy if the Republicans and Democrats do not remain at loggerheads. However, the consensus over the debt deal shows positive recovery for the political crisis as well. With acceleration in GDP, exports and household savings, the competitiveness of US companies appears to have grown stronger. As an interesting fact, the poor employment has led US productivity to take off. There are new business strategies and plans st the entrepreneurs’ end, who had decided to become their own bosses earlier in the past decade. Their current account deficits have fallen and this portion of the population is contributing to making a positive contribution to the country’s massive budget deficit. Anyway, the present decade is yet to reveal whether they will also be able to overcome the challenges