Last week, we talked about a report published by the census bureau reporting that in 2007, after adjusting for inflation, middle income Americans experienced the lowest income level since 1997.
Your assignment was to comment on the kind of impact that middle income Americans would likely have in the US economy going forward and how it will impact consumer spending which represents about 2/3 of the US economy.
In my opinion, the US is about to move from a market driven economy to a government driven economy. The numbers reported by the US Census Bureau revealed what many middle income Americans already knew, their disposable incomes are stagnant or declining. Furthermore, the inflation-adjusted value of their investments, both fixed and non-fixed, have declined over the last ten years forcing middle income Americans to cut back on spending. Second quarter GDP statistics reveal that personal consumption expenditures were down 1%, non-residential fixed expenditures were down 10.9%, and residential fixed expenditures were down 22.8%. At the same time, Government spending increased 11% during the second quarter. With unemployment approaching 10%, I expect to see this trend to continue. Government spending will likely increase as a component of GDP as consumer spending continues to decline. As a result, I would expect the government to continue to spend on economic stimulus programs to try to generate short term economic growth as measured by GDP, and in the process, it will become the decisive player determining economic growth in the US for the next few years.
Nevertheless, economic stimulus programs designed to influence GDP in the short term may not generate long term, sustainable economic growth. According to Federal Reserve Chairman, Ben Bernanke, the US recession is likely over but unemployment is expected to remain high at current levels through 2010.
How is it possible that a recession can be over and unemployment can remain at about 10% even after 12 to 18 months? Is it GDP alone a good measure of economic growth? Or is it unemployment and national disposable income growth a better measure of a country’s real economic growth?
GDP is Gross Domestic Product. In an article from the New York Times called R.I.P GDP said that if you hung out clothes in the sun people don’t make money and if you do laundry then you are adding to the carbon footprint. This is because people are working at these places to make money and get the fossil fuels we need. I think as we make more products or need more the economy will go up but the unemployment will stay as is.
I believe that the Gross Domestic Product is an effective way to measure the country’s economic growth. Even though it appears we are on the verge of exiting the recession numbers can be deceiving because there are is still a very large number of people unemployed according CNN. In a report by Joseph Stiglitz he warns focusing too highly on GDP “the United States — failed to factor in the social costs of joblessness and the public health impacts of environmental degradation. They allowed banks to borrow and bet unfathomable amounts of money, juicing the present by mortgaging the future, thus laying the ground for the worst financial crisis since the 1930s” according to an article on New York Times.com. Despite how the GDP is performing it still discounts many of the unemployed people says the New York Times which makes some people question the Gross Domestic Product as an effective way of measurement. So I think there good and bad that can come from the GDP but overall I believe it is a good way to measure the economic growth.
The GDP can be an accurate indicator that the recession is over, although it will take time for jobs to be created. In the article, “Unemployment, GDP provide hope for the economy” by Miranda Marquit, she states that “Improvement is being made, and there is a strong possibility that the worst of the recession is over.” Then about unemployment, “The pace of job loss may slowing, but doesn’t mean that a lot of hiring is going on.” However, she agrees, “It will take time for everything to work its way through the system, and companies aren’t likely to give up the cost-cutting measures until substantial growth—and income—are seen.” It took a while to get into this mess it will take time for things to completely recover, but by definition, the recession is over and although slowly, things are improving.
The GDP gives you a not always accurate percentage of the production of growth in the economy. In the article ‘Economic growth slowest in 4 years’ by CNN senior writer Chris Isidore says that “Economic growth sank to the slowest pace in four years in the first quarter, the government reported Friday, as the weak housing market, coupled with higher prices, took a big bite out of the world’s largest economy.” The large bite is going to take some healing.The growth was the weakest since the 1.2 percent rate in the first quarter of 2003 and it hasn’t shown much change. The GDP has many imperfections and have realized the problems and are trying to fix them, states Time Magazine. The GDP is working but not fully function it seems, eventually we will figure out what needs to be done and improve our situation
Can it still be possible for a country to be out of a recession and still have an unemployment rate of around 10%?. The answer is Yes, but not according to some sources. In an article on DailyFinance.com written by Peter Cohen, it is stated that the National Beureu of Economic Research said that this recession is primarily due to the number of job losses and cuts we have been experiencing over the last years. With 6.5 million jobs lost since December 2007 and another 546,000 jobless claims in the most recent July, the recession is far from over. When looking at GDP, i feel that it is vital to look at other things as well. Because GDP only looks at good and services, there are far more things that go into deciding if we are in or out of the recession. I feel that in order to be out of a recession, other things such as unemployment, housing markets, and interest rates on loans should be considered. There is far more things that contribute to a economy besides goods and services.
Because unemployment is still at 10%, using GDP to measure whether the recession is over might not be as useful of a tool as it once was. In a New York Times article called “Emphasis on Growth is Called Misguided” Peter Goodman writes, “So many jobs have disappeared so quickly and so much life savings has been surrendered that some argue the economic indicators themselves have been exposed as inadequate.” He also writes that, “much of the world has long been ruled by an unhealthy fixation on swelling the gross domestic product, or the quantity of goods and services the economy produces. With a singular obsession on making G.D.P. bigger, many societies — not least, the United States — failed to factor in the social costs of joblessness and the public health impacts of environmental degradation.” GDP is not as good of a measure as is unemployment and national disposable income when determining real economic growth.
Employment is the real threat to the American culture. It is said that idol hands do the devils work. To keep a country working properly people should be working for money and investing it back into the country. If the recession is declared over and the employment rate is still at 10% there would be a real problem. The government would think they are out of the tunnel and not do anything to change the employment problem. Hopefully our government will learn something from this rescission to better America. The people should come together and demand a solution to this problem not just a quick fix.
Although it is said to be that the recession is over. Americans are still facing his unemployment rates. President Barack Obama said in early August that we will not have a recovery as long as we keep losing jobs. He also stated that you need to have economic growth before you have job growth. He also added that recent reports showed signs that we are heading in the right direction, although the recovery will not happen overnight. According to the Wall Street Journal, Joseph stiglitz stated that the fact that GDP may be a poor measure of well-being or even market activity has long been recognized.
The recession really isn’t over, its just what the experts want us to think. The unemployment rate is very high and wont start to turn around until we truely are out of a recession. “GDP, which measures short-term spending, was not traditionally intended to measure well-being, And it is not a sufficient guide for modern policymaking that takes social and environmental objectives into account” (according to the NY TIMES). A new system is being developed over in Europe to solve this problem. This would bring us to the conclusion that unemploymet and national disposal income growth is a better measure of a country’s real economic growth.
I believe that the GDP alone is not an effective means to measure the over all statues of a country’s worth during a recession. I say that because even though the figures the GDP shows that the economy is exiting the recession, while other areas of the economy are down and will remain that same for a while longer. Unemployment being one of those areas, which is projected to remain at around 10% at least until some time next year, this contributes to the economy being slow over all. With the unemployment being that high, there’s less money for people to buy so the revenue that’s usually generated by the retail industry and other similar industry is nowhere as high as it was prior to the recession. So in short, GDP really shouldn’t be the major factor in determining whether or not a recession is over or not, because even though it says that we are, there still isn’t enough money to spend because unemployment is up.
I believe that economic growth cannot be measured in just one way. GDP as well as unemployment and disposable income percentages are all indicators. It is clear that if people have extra money to spend, then the economy is good. Business would subsequently increase because of this extra money. I think GDP is a better indicator for the more general economy, not just if the people have a little extra money to spend. There was an interesting article in The Economist. The article considered how although Americans have a higher GDP than citizens of France, the French work less and have a more leisurely life, so in a way they were better off than an American. Because there are many different factors like quality of life that may not have anything to do with money to consider, it is hard to say that one specific thing is an indicator of economic growth or recession.
I think that GDP can tell us some useful information about the economy, but that it should not be used as the sole factor in determining how well the economy is or is not doing. In 1991, the Bureau of Economic Analysis switched from gross national product to gross domestic product to reflect a changed economic reality, but it excludes many important factors. According to a September 22 article in The New York Times, economists Joseph Stiglitz and Amartya Sen say that focusing only on the GDP fails to factor in on the social costs. They report that “Instead of centering assessments on the goods and services an economy produces, policy makers would do better to focus on the material well-being of typical people by measuring income and consumption, along with the availability of health care and education.” These are just some of the reasons why I think that GDP alone does not reflect an accurate picture of our economy and should not be used as the sole factor in determining how well the economy is doing.
I believe when measuring economic growth GDP, unemployment, and national disposal income growth combined is a better way to understand the economy. Bermanke explains in The New York Times that peoples expectations are greater; thus there is going to be disappointment in a small growth in jobs, further he says that job growth be slow since the economy is rebuilding. GDP along with unemployment rates are great ways of showing the economic growth through its display of the wealth being created in the country. Lastly the national disposal income growth represents much of the middle class’s spending habits; when spending is increased, economic growth increases. Im conclucion GDP, unemployment, and national disposal income growth demonstrates more accurately the progress of a nation as a whole.
Economic recession can halt while unemployment remains high because of improvements in other area of the economy. According to economic columnist James Pethokoukis, GDP can increase without increased output from workers due to improvements in other areas of the economy such as housing, buying of stocks and bonds, investments by businesses, and a higher amount of exports to imports. Even though I do not believe GDP is a great indicator of economic growth, I think it is better than unemployment or national disposable income growth. Disposable income growth and unemployment are far to limited in scope. Although there are limitations to the GDP in terms of the overall health of the economy, like the inequality of incomes and the quality of goods, the GDP still accounts for more factors than both unemployment and disposable income growth.
GDP alone is not a good measure of economic growth. In today’s economy, there are several stimulus packages that will drive up the GDP, but does not necessarily mean that people have more disposable income. According to Olivier Blanchard, Director of IMF’s Research Department, people are being enticed to spend their money by the government through programs, such as cash for clunkers. He goes on to explain that the recession will not truly be over until people are spending money on their own without government influences. Furthermore, as the unemployment rate decreases, spending within the U.S will increase, resulting in a better economy.
THe recession is not over but it is improving. According to Mark Knold, Department of Workforce Serivce chief economist, companies are using the employees they have before hiring from the outside. GDP is not a good measure alone to measure the economy, it requires many factors. From the first steps, the economy takes time in order to “heal” as any qound would take to heal. Give the economy time and it will improve, yet GDP and unemployment may differ but neither is a great stand alone indictator of the economy.
The reason why unemployment remains high after the recession is over is because businesses are holding back until incomes make a contribution to there balance sheets. According to spokesman Scott Stanzel “The jobs numbers are consistent with slow rates of economic growth that we’ve had, but it is slow growth, but it is still positive,”. In an artical it said GDP is not a measure of productivity, it is a measure of spending like household spending, business spending, government spending, and the import/export balance. The GDP is not going to give us economic growth employment will. In this case economic growth determines based on employment rates.
There are many different factors that added up to bring this country in the situation that its in right now. Its naive to believe that GDP alone will fix all the problems. America runs on the flow of money, people need to spend money, and invested back in the country. How will people dare to spend money with a 10% unemployment rate? According to the Boston Globe “You can’t go from job losses of 700,000 a month, which was what was happening in the months leading up to January, to job growth like that, you know, just instantaneously,’’. This country will be out of a recession once its able to provide enough jobs to those willing to work. That should be the focus of the government right now.
The true measure of whether or not a recession is over lies not within the GDP, but within the unemployment rate and national disposable income growth. Usually GDP is the best measure but even with an increased GDP, unemployment rates are still high and this is because of uncertainty in the economy. Our recession cannot fully end until more jobs have been accumulated and disposable income is more readily available for middle income Americans. This is evident after seeing the GDP increase 6.4% in the first quarter of 2009, and decrease 1% in the second quarter (US Bureau of Economic Analysis); parallel with the government’s economic stimulus attempts. Seeing as the economy is mostly consumer driven, I do not think GDP is a good measure of economic growth.
I think it is possible that the economy can be technically out of the recession, yet still remain at approximately 10% employment. Just because the economy is not in decline, that doesn’t necessarily that growth isn’t stagnant. In my opinion, the funds alloted for the stimulus package would have had more of a profound effect on the current economic environment had they been released and used in a more timely and effective fashion. So far only 10% of the funds from the stimulus have actually been used, making the impact on the economy minimal which is why I don’t think the upswing in the economy has reached the job market.
I also disagree with the notion that our economy is going to change from a market driven one to a government driven one. The economic collapse of last year was a unique situation. It had more to do with a poor job of oversight by the government to financial institutions and wreck-less mismanagement on part of powerful companies as opposed to normal downfalls in the economy which usually are related to other factors. I think with more oversight of the financial markets the government and leaders of major corporations can prevent situations where companies become too big to fail , and yet land on the brink of disaster. I don’t think that the fears of some that the government will make bailouts an annual thing will be realized once the current predicament is settled.
In my opinion, the recession cannot be over with an unemployment rate close to 10%. According the Washington Post our economic conditions are merely stabilizing and laying the ground work for growth which proves the recession is far from over. The GDP may show a significant change in spending but it’s all a small part in overall economic growth compared to employing the 10% of Americans in need of jobs. The current status of the economy finally leveling out but will never have a significant change until people have jobs. In closing the recession being over should be based off the unemployment rate because of the simple fact that the more people with jobs making money will equal more consumers spending.
When a country suffers a near financial collapse it’s sets into effect many
obstacles and road blocks for buisness’s.Measuring this countrys economic status useing GDP is not a good choice if we were to measure it over longer periods of time. But GDP does give us an accurate reading for were
we are at a specific time. The problem is it is limited only to specific dates. If we measure the financial growth by unemployment we will have a longer time line to cover. Disposable income can also be an early warning
sign that there could be trouble in the future. Managing the amount of money consumers are spending is a smart way to gauge this country’s
financial scale. As for the recession, according to Newsweek 44 percent is
what the stock market has rallied since March. We may have corrected the source of the problem but now we are left to clean up the mess it has left.
How is it possible that a recession can be over and unemployment can remain at about 10% even after 12 to 18 months? Is it GDP alone a good measure of economic growth? Or is it unemployment and national disposal income growth a better measure of a country’s real economic growth?
I believe that the recession is not over and the GDP alone is not the best measurer of economic growth. while it is true that sales have increased (therefore raising the GDP), the unemployment rate has continued to rise. according to the NY times, the unemployment has continued to rise, and in august, it reached 10.3%. one of the only reasons that the GDP has increased is because of the government stimulus money (e.g. cash for clunkers). it should also be noted that it is always better to use more data than less. the GDP only covers one aspect of the economy, as do unemployment and national disposal income growth. that is why i think that we are still in a recession – the unemployment rate is still really high and the GDP is up only because of the government stimulus money. without the the stimulus package, people will not spend their money.
How is it possible that a recession can be over and unemployment can remain at about 10% even after 12 to 18 months? Is it GDP alone a good measure of economic growth? Or is it unemployment and national disposal income growth a better measure of a country’s real economic growth?
The GDP can be an accurate indicator that the recession is over, at the same time it will take a while for jobs to be created. I think the effects of the recession will take time to wear off even if the GDP says that the recession itself is over. I also believe that the GDP isn’t a good measure of economic growth. The GDP may show a significant change in spending but it’s just a small part in the overall growth of the economy when comparing it to umemployment of 10% Americans in need of jobs.
In my opinion, I do not think that the recession is over. With the goverment promoting many stimulus packages to improve the ecomony it is a short term repair because they are borrowing tomorrows money. In theory, this concept helps our current situation by employing many americans BUT layoffs will surely be in the pipeline once the goverment funded programs have stopped and the unemplyment rates will again increase. The GDP alone is not a good measure of ecomic growth. It demonstrates that you cannot borrow your way out of debt, its hawking our countries future growth.
GDP can not be viewed as an accurate way of measuring our economic stature. The numbers are only on the rise due to government created programs, which was to a limited market of consumers. Cash for clunkers got our economy back on the rise for a brief period, but that program was designed to help out the automotive industry, because many car companies struggled to stay afloat in today’s economy. Unemployment is still on the rise, and consumers don’t have the cash to guy goods. The recession is nowhere near over, well just have to wait for the next goverment program to delay the downfall of the economy.
The Recession can be considered over due to the measured increase in GDP, regardless of unemployment, however just looking at one aspect isn’t enough to predict economic growth. If government spending does increase then that would lead to the proclaimed measured increase in GDP, which would not affect the employment field and thus keep unemployment percentage constant. Eventually, the economy would need to rely on the middle class to keep it moving in the right direction, and with time the people can save up enough to have some disposable income, which is probably what the government is hoping for. With little clues such as consumer spending increasing by 0.6% and even sights such as a full restaurant, as stated by MSN’s money article, you can how and why the government can take certain actions and expect an end to the recession approaching. This is how it is believed that the recession is ending, regardless of unemployment.
I don’t think it’s possible that a recession can be over and unemployment can remain about 10% even after 12 to 18 months however, the recession is yet to be over. Unemployment is still on the rise and if the unemployment rate stays at 10% consumers wont be spending their earnings. People who are out of work cant spend, and people who fear being out of work wont spend. Companies wont hire or buy supplies as long as consumers aren’t spending. GDP is the market value of all goods and services produced in an economy. I don’t think GDP is the better measure of the economies growth. I think that if the government is paying a percentage to unemployment depending on how much they worked and made but if these people were working they would be making more than unemployment pays and more people would have jobs. The government could stop paying unemployment and this would increase consumer spending because people would be making better money. Anyways, GDP measures the final goods but if there were more people to buy final goods instead of being unemployed there would be an increase of demands for goods which means employment would probably increase as well. I do not think GDP is a good measure of economy growth and I don’t think the recession will be over until the unemployment rate starts to drop.
I don’t think the recession is completely over because of the fact that the economy is still in chaos and it will take it a while to get back as it was. And as GDP shows it, I also believe that the unemployment rate will still be higher in the next 12 months or so. For the recession to be over the country economic situation has to be sable,flourished and very promising and our economic situation has not shown any promise yet; the government is still spending a lot of money on economic stimulus, private investments are down, and the consumptions are not high as it was in the previous years. GDP alone can not really give us a clear measurement on the economic growth, they should take in consideration the number of unemployment, because if the rate of unemployment go down, people will be more likely to spend and don’t watch every single penny they are spending. I do believe that the country will be out of recession, once the unemployment rate goes down in percentage and when the country starts saving instead of spending.
The recession may be over but unemployment will remain high due to the insecurity that companies still have. Companies may still be unsure that they are stable enough to begin rehiring or replacing. GDP is and will continue to be a good measure of economic growth because GDP is the amount of all goods and services produced. If the amount of goods and services increase, that means that their will be a bigger need for employees which will then increase the national disposable income. That is why I believe the recession may be over but unemployment will continue to increase and why GDP is a good measure of economic growth.
In my opinion GDP alone, is not a correct alternative of determining if a country’s in a recession or not. In the article”Emphasis on Growth Is Called Misguided” by Peter Goodman, there has been a obssesion on making GDP rates bigger, that the USA failed to factor in unemployment and puclib health degredation. It also states that leaning only on GDP as an economic philosophy may cause unhapiness. How can we be out of a recession if the unemployment rate is still siting at 9.7 % and will problably keep climbing higher for many months. I believe a recession should be measured by GDP, unemployment rates, and income rates.
GDP is a good way of telling if a country is in a recession or not. GDP is the market value of all the final goods and services produced in a country during a period of time. If the GDP goes down during a year it shows the country is producing less products. A better way of showing if a country is in recession, is CPI, which stands for consumer pricing index. This shows how much a consumer spends through out a period of time.
Even thought, a recession can be over and the rate of unemployment can remain about 10%, economic situation cannot reliable to GDP at all. GDP is total market values of goods and service by produced by workers and capital. Likely now day, most of the middle income trying to cut down their expense because they have to watch out the money so I think the opportunity for expand the market should be lower, which mean that GDP alone is not the best ways to keep the economic growth.
Is GDP a better formula to determine economic growth? Or is Unemployment and national disposal income growth? I personally believe Gross Domestic Product which is abbreviated GDP is not the best formula to determine economic growth because it is the sum of all of the economic goods which are giving benefits to the country in economic or monetary terms. It is important for a country overall because it tells about the present economic status of a country in world. A country with high GDP would be having improved and standard economy while a country with low GDP would be having low standard and poorly developed economy. An article from “Businessweek.com” states “third-quarter real GDP is expected to rise. But as Joe Stiglitz and Amartya Sen of Business-week argue in a new report, GDP is a poor measure of well-being. Rising GDP does not mean the downturn is over.” So unemployment and national disposal income growth is a better judge to determine economic growth.
I would have to say that GDP alone is not an accurate measure of economic growth, and unemployment rates will increase. GDP is a very general and sometimes a vague measurment. The economy is not only dealing with sales and goods within marketing but also a lot of government related issues. Unemployment is becoming a larger issue today in the U.S. GDP is supposed to measure the value of output of goods and services, yet we typically have no way of accurately doing so, therefore, we often measure the output simply by the inputs. If government spends more, even if it is inefficiently, output goes up. I do not find it possible that a recession can be over and unemployment can remain at about 10% even after 12 to 18 months. The only way for such a thing to happen is if the majority of Americans work to decrease unemployment rates and start savings funds. GDP, unemployment, and the national disposal income growth analysis combined to make one effective score I believe are the most accurate ways to meausure a real economic standing.
The GDP numbers, are rooted in the economy of the marketplace — totaling up the dollar value of big activities such as business investment and consumer spending, as well as government activity. It’s useful in as far as it goes. Few numbers have the cachet of GDP. The announcement of its growth rate each quarter provides a speedometer of economic growth or — perhaps in the next few months — recession. And few numbers have the scale of the GDP. By latest tally, the annual production of goods and services in the United States has grown to about $14 trillion.
Even though the recession is over, we can’t just create jobs over night, these things take time. A lot of people went bankrupt and lost their businesses. But even though the recession is over, it doesn’t mean that those people will get their businesses back. New people with fresh ideas are going to have to step up and open doors. It might not seem like times aren’t getting better, but they are. The economy has hit rock bottom, but now there is only one way it could go and that’s up, we just have to be patient.
Although the numbers are showing that the recession is over, the unemployment rates are saying otherwise. According to the New York State Department of Labor, the state private sector job count has dropped for nine consecutive months. The unemployment rate in New York has gone from 8.0%-9.0% from April-May 2009. The GDP may be coming up, but the people that live in this country matter more than the numbers that the GDP show. We should be more worried about the people and their families then the numbers on a sheet.
I believe that GDP tell us how the economy is doing for the current years. According to infoplease “If the economy grew 3.5% last year. That means GDP grew 3.5%” When you refer to the economy you are basically referring to GDP because they are one in one. ” A growing economy generates increasing amounts of jobs, incomes, goods and services for its citizens. ” If Economy goes up GDP goes up and if the economy goes down GDP goes down, then another component has to come in and make up for the loss. This is how i believe GDP tells us about the economy.
Many people believe that the recession is over but I believe its not over. I think the recession is over when all the people that are unemployed get jobs. GDP only is synonymous with the economic growth in certain criteria’s. GDP in my opinion is not a good measure of economic growth, in return the unemployment is a better measure of the country’s real economic growth. Once people have jobs, they will receive income, once they have income then they will use some to buy things, when people start buying things economic growth will start happening.
I think that the government is clearly trying to “spin” the story to the American public that the recession is over but it is obviously not the case. The unemployment rate is at 10% and still rising. The unemployment rate is one of the most important indications as to whether or not the econmy is on the rise, which it doesn’t seem to be. If more people are employed and income is becoming more steady than the GDP is directly affected. Purchasing power is detrimental to the economy. The more we purchase, the better off the economy is. With consumer spending down, so is the gross domestic product. This is simply a case of common sense, as long as one chooses to think about it.
No, I do not think the GDP alone is a good measurement of economic growth. Job losses are usually proportional to the decline in GDP. The unemployment rate is not only one of the causes of American’s struggles with money today, but it is a main cause of the recession. Unemployed people do not spend money where it is not needed. The country’s real economic growth should be measured solely on American’s ability to afford the high cost of living today, given the opportunity to become employed.
I think that all of these things have an enormous affect on economic growth. While a rising GDP is extremely important because it is definitely a good sign. But the fact that unemployment staying about 10% COULD be a bad thing. I say could be because it could mean that 10% of this country is still lazy, now i know that people arent usually at fault for being on unemployment. Another bad sign about unemployment is that a lot of people on unemployment know that many of the jobs they could get would pay them just as much if not less than their weekly “unearned” checks. This means that companies still cannot afford to pay these people decent money even if more money is coming in. Now disposable income can’t go up until the economy is growing. So if that is staying the same then things aren’t going well either. Growing GDP just means people are buying more and there are many things that could cause that.
GDP stands for Gross Domestic Product. Also, it is the final value of all goods and services produced in one year. The recession is possibly over but unemployment rates are still rising in the United States. Even though GDP is a good tool for measuring economic growth, it is not always accurate. Analyst and Politicians shown on CNBC predicts that the economy will be a whole lot worst in the next ten years.
The Recession may be over but doesn’t mean that unemployment rate has to go down, it will remain high due to the insecurity that companies have. Since many companies cut down there expenses, companies won’t hire or buy supplies as long as consumers aren’t spending. GDP could be very reliable for unemployment rate to decrease because GDP is the total market value of goods and services produced in an economy. If the amount of goods and services increases, there could be a very high chance that companies need to rehire employees, which will then increase the nation disposable income. The country will not completely be out of a recession until unemployment rate decrease, and consumers spend more money so GDP can increase.
The recession ending doesn’t mean that unemployment will stop. It only means that less people are losing their job and that the economy is doing a little better. The way they measure on when the recession is over is by looking at the GDP. If the GDP starts going up then the recession is over. I think that GDP is a good way to measure a country’s overall performance.
GDP can be a somewhat accurate way of measuring economic growth. Though it has many flaws as well such as being very vague in its measuring. With this in hand it doesn’t give companies and employers complete comfort in hiring new employees. So in turn the unemployment rate most likely will not rise. I feel as if the recession may soon come to an end but we are still in one. The after math of this recession will most likely go on for sometime until unemployment rates are low, consumer market increases and people feel comfortable spending their money again. That is why i feel GDP needs to be more accurate to speed up the ending of a recession.
According to the deffinition of GDP a country can be out of a recession but still have high unemployment rates. This is a strong indicator that GDP is a bad way of measuring a country’s economy. All of the articles that I have read about GDP describe it as a very complex number that can only indicate if a country’s economy is expanding or contracting. Even if a country’s GDP was to change that does not mean, at all that unemployment has to change. This is a perfect example of why GDP is not a good way of measuring a country’s complete economic state.
It is possible that a recession can be over and unemployment can remain at about 10% even after 12 to 18 months. According to what President Barrack Obama stated to the CNN’s “state of the Union” program, the signs are all positive towards the economy growing. The only thing he was unsure about was that the unemployment rate might worsen. In my opinion, GDP is not a good measure of economic growth. It would be better to include the unemployment and national disposal income growth to determine the economy’s recovery. It seems that the President included that but at the same time he stated that the economy is recovering. This led me to believe that unemployment and national disposal income growth is a better source to distinguish the economy and its getting better or getting worse.
Short term ecomonic stimulus packages may look good on paper for now, but they are exactly that, “short-term.” As the unemployment, and the GDP are both good but not entirely accurate measures of the economy, there is simply no way our recession can be completely over with percentages that high. As the topic claims that unempolyment rates are likely to stay around and above 10% through 2010, things are looking horribly dismal in that regard. Instead of temporary programs like the former “Cash For Clunckers” program, the government needs to focus on a way to create long term stable jobs and get Americans who were laid off back to work without interfering so much that they solely run our free market economy. Regardless of the way that this problem is solved, I can not imagine there is any quick solution that could show great results in only one year, this is going to take a good amount of time.