A Joyless Recovery, Reaction Paper Example

The issue of the rise of the GDP “gloss domestic product” at a rate that was annualized to the extent of 3.5%during third quarter in comparison with second quarter is appreciable due to the fact that it was the first of its kind during the year 2008 second quarter. This indicated the termination of recession on the onset of the third quarter. However, there seems to be some drawbacks in the decision of National Bureau responsible for Economic Research, an assemblage of economists in academia. According to the opinion of some of the members, the end of the recession whose initiation was on 2007 December was June although it had extended for the last 18 months thus qualifying as the longest experienced since 1933 (The National Archives & Michael,  2009).

The skeptism experienced by the consumers has some justifications as a result of the fall of their confidence since October with 35% of the economists being for the opinion of the worsening of the economy in comparison to 28% who positively believe on the improvement of the economy. The consequences to this the elevation in the rate of unemployment with majority of the growth in the third quarter being imputed to the temporary stimulus of the government. The result of this is the growth in the spending of the consumers by a magnitude of 3.4%  as a result of the purchase of new cars over the month of July as well as August using federal “cash for clunkers” but ever since, there has been a decline in the sales. On the contrary there was an accompanied dipping in the sales of residential homes (William, 2009).)

This has created a situation of worry among the voters in reaction to the economy with a disapproval of the handling of Barrack Obama in the range of the margin of 47-43% leading to the spurring of the president together with the rest of democratic leaders towards the exploration of innovative measures of stimulus. There issue of the extension of the insurance benefits in the case of the unemployed is likely to improve the conditions of the workers. The same would apply in the case of the subsidies for the insurance of health on the part of the losers in job since the recipients of the money require it for important use.

There is however a dubious situation associated with the extension in the tax credit of new homes for the purpose of lessening the amount of the credit on the part of home owners. The additional $250 meant for the beneficiaries of social security as a result of the lack of an increase in the living cost has some positive ramifications for the beneficiaries. Due to the fact of the negative inflation, the benefits tend to assume a flat nature leading to a rise in the real benefits(Niall, 2009).

As a result of the prematurity of the new stimulus, third quarter growth has the reflections of the dynamics of recovery that are genuine with the rise of both the equipments as well as exports that is consequential to the slow pace of perpetuating the inventories of the companies  (Rebecca,  2009). The slow rate in construction has resulted to the depression in the sales as well as the inventory of the new homes that have not yet been sold with an implication for a further expansion in construction. The downfall in the rate of employment as a result of the recent recession is as a result of the attempts of the companies in reducing the costs as a result of a fall in the sales and a turn around in the profits. The addition of more stimuli will have an impact on the high deficit that is already at a dangerous level. The need for the stimulus however may soon occur in the future at the waning of the inventory boost and especially with the initiation of a plan for deficit reduction.

References

Rebecca, L. B.  (2009). A question of priorities: democratic reforms and economic recovery NY: Berghahn Books.

William, Z. S. (2009). U.S. and allied efforts to recover and restore assets stolen. NJ: DIANE Publishing.

The National Archives & Michael,  B. (2009). Our Documents: 100 Milestone Documents from the National Archives . US:  Oxford University Press.

Niall, F. (2009). Colossus: the price of America’s empire. Author NY: Penguin.