THE CURRENT MACROECONOMICS SITUATION IN THE UNITED STATES Essay

THE CURRENT MACROECONOMICS SITUATION IN THE UNITED STATES - Essay Example Continuous increase in the prices of food, shelter and gasoline lead to an increase of 0.2% in August, 2011, same as the previous month. Apparel and shelter are the biggest contributors whereas the prices of health care, personal care, medical care, household operations and furnishing have also seen to be increased significantly. Since April, the Unemployment rate has detained between narrow ranges of 9.0% to 9.2%. Currently, the unemployment rate is 9.1%. The number of long-term unemployed people is 6.2 million, as recorded in September, 2011. These individuals accounted for 44.6% of the total unemployed people in U.S. GDP growth rate is an important indicator to measure the strength of an economy. GDP growth rate is said to be positive when the economy develops. Annualized Growth of real GDP has been recorded far below than 5.4% than the normal recoveries of previous business cycles. Credit rating of U.S is also at risk. Credit rating agencies have downgraded the credit rating of U.S from AAA to AA. Many economists now believe that America’s economy has gone fragile. They recommend that it would not be to cut down the consumption and increase tax rates at this point of time. The dysfunctions in U.S have immense pressure from increasing population, globalization and technological advancements. The U.S requires smart and effective policies in every area. It needs to spend in areas like retirement funds and health care whereas it is encouraged to invest in the fields of research and development, education and infrastructure in order to grow. U.S is at that point of budgetary limits where money should to be used wisely and only on effective projects. But in every other area, government policies are suboptimal. The world used to look at the U.S with awe as Americans had built highway systems for interstate, created best standard for education in the world, invested heavily in the frontiers of knowledge. But this is not now how the world perceives America