The terrible news which came from the US Economy yesterday was S&P (Standard & Poor's) cut the credit rating of America from AAA to AA+. So this negative news, no doubt will affect not only US economy but also the world economy.
In this context let us discuss the article written by Paul Krugman, Nobel prize winner in New York Times News Service. This explains how Unemployment affected the US Economy in the past 3 years.
"In case you had any doubts, Thursday's more than 500-point plunge in the Dow Jones industrial average to near -record lows confirmed it. The economy isn't recovering, and Washington has been worrying about the wrong things. It's not just that the threat of a Double-dip recession has become real. It's now impossible to deny the obvious, which is that we are not now, and have never been, on the road to discovery.
For two years, officials at the Federal Reserve, international organisations and, even within the Obama administration have insisted that the economy was on the mend.
But the economy wasn't on the mend. Yes officially, the recession ended two years ago, and the economy did indeed pull out of a terrifying tailspin.
But at no point has growth looked remotely adequate, given the depth of the initial plunge. In particular, when employment falls as much as it did from 2007 to 2009, you need a lot of job growth to make up lost ground. And that just hasn't happened.
CRUCIAL MEASURE
Consider one crucial measure, the ratio of employment to population. In June 2007, around 63 percent of adults were employed. In June 2009, the official end of the recession, that number was down to 59.4 percent. As of June 2011, two years into the alleged recovery, the number was 58.2 percent.
These reflect a truly terrible reality. Not only are vast numbers of Americans unemployed or underemployed, for the first time since the Great Depression many American workers are facing the prospect of long-term unemployment. And why should we be surprised at this catastrophe.....????? Where was the growth supposed to come from...??? Consumers, still burdened by the debt they ran up during the housing bubble, aren't ready to spend. Businesses see no reason to expand given lack of consumer demand.
The point is that it's now time long past time to get serious about the real crisis the economy faces. The Fed needs to stop making excuses, while the President needs to come up with real job-creation proposals."
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| Paul Krugman |
(This article was written by famous Economist Paul Krugman in New York Times News Service. Courtesy to Business Line.)
Regards Hari " लोका समस्ता सुखिनो भवन्तु "
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