The economic situation in the United States today could be considered as one of the deepest crisis the mankind has seen in so many years. The GDP growth rate of the country has decreased and ultimately got in the negative figures. The GDP growth rate in the year 2009 was -2. 4%, the inflation rate of the nation got around at 2. 2%. After the credit crisis and the subprime crisis, the overall economy was hampered with phases of rapid unemployment and bailouts for biggest financial sector companies.
The overall trust in the service sector was reduced to a considerable level. The unemployment rate in April 2010 was estimated around at 9.9%. Due to continuous decrease in the growth rate of economy, the level of public debt also increased and reached $12. 28 trillion (January 2010) which is 84% of GDP. (“National Economic Accounts–nd”) But after the deep recession period, the economy is finally showing some signs of relief and recovery now. Though the expected growth rates are still negative, still the cumulative growth rates are expected to be better in the coming financial year. Provided the amount of the economic unscrambling the nation had witnessed in winter 2008-2009, the recovery pattern is still very weak, most importantly in persistent financial difficulties.
The US congress and Federal Reserve have taken a number of steps in order to ensure that the current financial condition could be stabilized and active efforts could be made towards recovery and growth. The most extraordinary of those were producing a Primary Dealer Credit Facility and helping the acquisition of Bear Stearns by J. P. Morgan Chase. The Federal Reserve along with the Congress has continued to use the conventional macroeconomic tools in order to combat the current situation. (“The Current Economic Situation–nd”)
The bailouts and government intervention into an otherwise free market are indications of such steps initiated by them. Taking account of the steps taken by Federal Reserve, the short term rates have fallen but still the amount of risk in the interbank loan market has not changed much over the time. References: The Current Economic Situation: Retrieved on 5th June 2010 from website: http://www. cbo. gov/ftpdocs/90xx/doc9078/Chapter2. 4. 1. shtml National Economic Accounts: Retrieved on 5th June 2010 from website: http://www. bea. gov/national/index. htm