Despite the Aftermath of the Great Recession
Despite the fact that the Great Recession ended in 2009, the majority of Americans are out of work or are unable to find full-time employment. There are still instances of shaky housing prices and economic disparity. European investors are concerned about the stability of their currency, and the US stock market is volatile. Even if the biggest financial problems have passed, the aftershocks of the 2009 slump are still felt. The economic environment in Europe over the next few years will determine whether the economy grows and whether the wealth divide narrows. Most economists feel that in as much as the recession ended a while back, cases of unemployment are still stuck at 8%. The housing crisis is experienced, and the response of the Federal Reserve to the poor growth was a reduction of interest rates. After taking unconventional steps to push down interest rates, the economy stabilised thereby preventing the depression from turning into a second great depression. After prevention of the economy going through a second depression, it is important for the people tasked with formulation and implementation of policies to manage expectations.
The Role of Policy Makers
The policy makers at the Federal Reserve expect the interest to be exceptionally low until after June 2013. Management of expectations will involve spelling out a contingency plan that involves what the Fed needs to do before rates start rising. On this basis, most economists suggest that it is of great importance when the overall inflation rate is kept in check. Though there is a group of economists, who believe that for the economy to be stable, there needs for the policy makers to watch inflation but exclude volatile prices of food and energy. Some economists believe that the problems faced by America are unsustainable budget and high levels of unemployment. This has led most economists and Americans to demand aggressive action in the form of formulation and implementation of fiscal policies (Wiegand 203).
Addressing the Problems
Addressing the problem should not take long because addressing the two major problems requires bipartisan support. In the long term, health care costs are expected to be higher, and retirements are expected to cause deficits greater than the one experienced currently. However, the focus is not only on the deficits because persistently high levels of unemployment are destroying lives and wasting talents of Americans. This is because the longer people stay out of employment, the more likely they suffer from loss of skills and this, leads to withdrawal from the labour market.
Efforts to Improve Unemployment
On unemployment, there is strong evidence that fiscal stimulus lowers joblessness and raises employment. Some of the motivations to get people back to work are cut of the payroll tax and extended unemployment insurance. I believe that an increase in the size of the federal debt in efforts to spur economic growth should be reconsidered. It is important to reduce the size of the federal government so as to reduce the government's debt (Komlos 125). Most policies and Legislations have been passed to free up the labour market and to boost economic growth by reducing unnecessary regulations.
Utilizing Environmental Resources
Efforts to improve unemployment include reduction of restrictions in the labour market, reduction of costly regulations, and use of environmental resources. Regulatory burdens and environmental restrictions in America have hampered the creation of new jobs. There is a wide array of idle natural resources in America and legislations to free up the resources for productive use have been passed. Through this, thousands of jobs will be created, and the tax revenues will increase. The article does not put into perspective all issues that pertain to unemployment situation in America and how effective or ineffective the labour market is.
Work Cited
Komlos, John. What Every Economics Student Needs to Know and Doesn't Get in the Usual Principles Text. New York: M.E. Sharpe, 2014. Print.
Wiegand, Steve. Lessons from the Great Depression For Dummies. New Jersey: John Wiley & Sons, 2009. Print.
