U.S. Economy/Global Economy

Summary:  A couple different view points relating to the current economy and the outlook for the economy.  It will also touch on the aspect of the current global economy including the crisis in Europe.  I know that the economy and what we have to look forward to is a big issue currently and since Economics is my major I am going to try to give you a perspective of my interpretation of the economic situation both the United States and the global economy is in.


The U.S. economy in 2011 saw some unexpected declining as the crisis arose in Europe.  The future outlook for the U.S. however doesn't suggest another recession, keeping in mind that recession is defined as a decrease in GDP for more than one quarter.  There is some speculation that suggests that the key to the rebound of the U.S. economy is the housing market, different economist do predict that the decline of the housing market will come to an end in 2012.  If the decline does stop and their begins to be slow growth in these area's it may lead to an increase in consumer confidence which will ultimately increase the currency circulation.  The higher currency circulation, or the amount of times money changes hands, has shown to increase the likely-hood of economic growth.  Consumer confidence however is most affected by the job market, if people can find jobs they can make money to spend.  The unemployment rate does not seem to go down unless the GDP growth rate is above 2.5%.  Another way to think about it without getting over involved in fancy terms and statistics is this;  Our economy will recover eventually if we can do four basic things.

1. Promote business confidence (Which will lead to an increase in the job market.)
2. Cut pork spending (Cut out unnecessary spending in the gov.)
3. Support innovation (Small business's make up a huge portion of the U.S. GDP)
4. Give it time (the economy won't recover overnight much less over a year or two)

A lot of people out there believe it or not believe that our economy can be saved in such a short amount of time.  What people do not realize is that the economy works almost like an ecosystem, when one thing goes out of balance the whole thing collapses and it takes a long time for an ecosystem to recover.  Certain legislation will help that is not to argue, but one bill or one idea will not save the economy, it will take a collaborate effort by everyone not just the constant change of political reigns.

My focus is primarily with the US economy, but it is impossible to state that the economy of the US is not affected by the global economy.  Importing a majority of our finished products is a very bad thing for the US in a sense of "economic security".  When I say that I mean that the more reliant we are on other countries to produce products for us the more their market matters to us.  What we need to do is bring production back to the US and avoid the outsourcing we have promoted for so long.  The reason a lot of US companies outsource is because it is dramatically cheaper than it is to produce the same product in the US. Unfortunately this causes a big drop in the job market which results with a high unemployment rate.

Post to be continued. (Next, the global economy and the European Crisis)