U.S. Economic Growth in a Post-Recession Economy Essay example

2205 Words Feb 17th, 2014 9 Pages
U.S. Economic Growth in a Post-Recession Economy

Jude Pandova
I BBA LLB

Index:
1. Hypothesis
2. Background
-Severity of the 2008-09 Recession
3. Fiscal Policy Response to the Financial Crisis and Recession
4. A Sustained but Slow Economic Recovery
5. The Shape of Economic Recovery
- Demand Side Problems:
-Supply Side Problems

6. Economic Projections

Hypothesis:
Study of whether the Congress reforms and fiscal responses could balance the struggling US economy following the 2007-2009 Recession. Also a study of a viable projection as to current Macroeconomic concerns including whether the economy is in a sustained recovery, rapidly reducing unemployment, speeding a return to normal output and employment
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Congress and the Obama Administration passed the American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5). This was a $787 billion package with $286 billion of tax cuts and $501 billion of spending increases that relative to what would have happened without ARRA is estimated to have raised real GDP between 1.5% and 4.2% in 2010 but increased real GDP by progressively smaller amounts in the years that followed.96
In terms of extraordinary measures, Congress and the Bush Administration passed the Emergency Economic Stabilization Act of 2008 (P.L. 110-343), creating the Troubled Asset Relief Program (TARP). TARP authorized the Treasury to use up to $700 billion to directly bolster the capital position of banks or to remove troubled assets from bank balance sheets.
Congress was an active participant in the emergence of these policy responses and has an ongoing interest in macroeconomic conditions. Current macroeconomic concerns include whether the economic recovery will be sustained, reducing unemployment, speeding a return to normal output and employment growth, and addressing government’s long-term debt situation.
A Sustained but Slow Economic Recovery:
The U.S. economy, as measured by real GDP growth (i.e., GDP adjusted for inflation) began to recover in mid-2009. However, the pace of growth over the next 3½ years was slow and uneven. From the second half of 2009 and through 2010 real GDP increased at an annualized rate of 2.5%. Compared
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