The US economy has seen different phases in terms of growth and sustainability. Although there are a number of challenges in our economy today, it is important to realize that the current situation is reversible. There are different strategies that can be adopted, in order to improve the scene.
The era of the information technology revolution saw some of the best times for the US economy where the most number of jobs were opened up. These jobs were created in numbers of the order of tens of millions and this was during the Clinton Administration. He left behind a surplus for the US economy just when the Bush Administration came into being. This was the brightest phase for our economy. The Bush Administration, however, left behind a bad economic scene for the Obama Administration (meaning it left a deficit). The jobs that had been created had generated a surplus of taxes and the growth proved to be, in the long run an unsustainable one.
The deficit was a result of a number of things that resulted from the 9/11 attacks. The event itself proved to cost lesser than the aftermath and the small and big impacts of it all over the country. The post attack phase led to a major setback in the economy. A whole lot of money was invested in fighting terrorism and terrorist activity in different parts of the world, in countries like Iraq and Afghanistan. Also, back here in America, the Department of Homeland Security was being built, which again required heavy monetary investments. The Medicare Part D (prescription) entitlement program was initiated and it cost the US government as well. The major part of the deficit, however, can be attributed to the process of having exotic financial instruments leveraged, such as securities that are backed by mortgage. It helped create an asset bubble for housing long before Bush was in office. The same concluded in a crisis of the US economy which was taken over by the Obama Administration eventually.
The year that followed on from 2009 (which is when Obama took office), ended up becoming a historic one in the economy of the United States. The spending/receipt gap were of sizes that our country had never seen before. The greatest gap in the modern history of US was seen in FY2009, as the US federal budget had a deficit of $1.4T. The expenditure went further up by 18 per cent in the same year. This was the highest growth rate seen in the past three to four decades. Tax receipts also went down from the previous year, leading to the widening of the gap. The federal deficit, as a result of this, became the highest in the past five decades. www.jobenomics.comexplains how the situation is reversible.
The Obama Administration controlled the situation to a great extent, without which the country may have gone into a second depression. There are a number of ways to prevent further negative growth of the economy, of which one of the most effective is the creation of jobs (www.jobenomics.com).