Question

What do you think are the causes of the current state of the economy?

Answer 1

The US economy has been in a state of recovery for several years now after the subprime crisis. Through the Obama presidency the levels of unemployment in the US have been declining and also the minimum wage has increased during the last 10 years. The level of interest rates set by the central bank has also been low so as to increase the level of economic activity. The current problems mainly refer to the state of healthcare and how it will be funded. The US federal budget is also in deficit and has been now for quite some time. This has been due to a lack of a proper planned tax structure which has reduce tax revenues and increased inequalities. The proper management of fiscal and monetary policy is the target going foward to try and stimulate the economy.