American Economic History
The figure below illustrates the United States’ GDP for years 2000-2009. Notably, the American GDP has been on the rise from 1999 with 2008 recording the highest output of $ 14718. 59 Billion. In context, for years 2001, 2002, 2008 and 2009 the country experience recession with years 2001 and 2002 recording an annual growth of $355. 69 Billion, while 2008 and 2009 recording a negative growth of 299. In the United States alone, the bursting of the housing bubble as a result of housing market correction and subprime mortgage crises led to shedding of roughly 9 million jobs and a 4. 2% contraction of GDP between the last quarter of 2007 and the end of 2009 fiscal year. Toward the end of 2008 fiscal year, the country recorded the highest growth of $3721. 07 Billion between 2002 and 2008 or $620. 18 Billion on average over the years (U.
1% reduction in year 2000 came as a result of lower economic growth but with an increase in the prices of goods and services with a 0. 7% inflation. For instance, rate for 2001 rose to 5. 7% largely attributed to tax cuts and subsequent 9/11 terror attack that led to shift and closure off businesses. For 2003 to 2006, the country enjoyed favourable and reduced levels of unemployment at an average of 4. In context, evaluation of deflation/inflation benchmarks the estimates on a chosen base year with an average of 2% inflation indicating a healthy business cycle. From a macroeconomic perspective, economic expansion of over 3% creates asset bubbles that ensures peak of business cycle and subsequent contraction along a specific timeframe and growth trajectory. Notably, the country experienced low and stable inflation rates over the years with year 2000 recording the highest rates at 3.
4% and 4. 1% for 2007. 3% contraction of the GDP growth as a result of 2008 financial crisis and a 0% injection of Fed’s Fund Rate. From a different perspective, the economy experienced a 1. 4% increase in inflation over the 2003 and 2004 due to 1% increase in Fed’s Fund Rate and the implementation of the JGTRRA program that led to a 1% increase in the aggregate GDP over the period. A 0. 1% surge for year 2005 and subsequent 0. For instance, in May 2000, the country enacted The US Trade and Development Act of 2000 that aimed at providing duty-free treatment for eligible goods and services from designated developing economies. To capture the immense contribution by the Sub-Sahara economies, the country tweaked the publication into titles, whereby title 1 of the [pub. L. No 106-200] provided for African Growth and Opportunity Act [AGOA] for duty and quota-free products for beneficiary countries.
In October of the same year, the country enacted the US-Caribbean Basin Trade Partnership Act to supplement the CBERA quota-free treatment for apparel from qualifying Caribbean countries. Notably, the crashing of the NASDAQ in March 2000 slowed down the growth in GDP resulting to a short-term recession, and by March 2001, the Federal reserve increased interest rates in a gradual manner by benchmarking on the stock market. The historic 9/11 terror attack further affected the county’s economic growth trajectory with Dow Jones Industrial Average recording the massive losses of all time, consequently, leading to market crash in the second quarter of 2002. The economy peaked again but toward the end of the third quarter of 2007, a contraction of the real GDP brought to reality the collapse of housing-related assets.
Consequently, the looming global financial crisis of 2007 and 2008 necessitated the government’s $700 Billion bank bail out and a further $787 Billion stimulus package intended to shield the country from shocks of the global recession. In the packages, the government purchased distressed assets while injecting capital into banks in a significant portfolio risk aimed at promoting government-supported enterprise to protect deposits in the money market and mutual funds. The figure below illustrates the concept adopted for the years 2000-2009. From the illustration above, 2000 and 2001 favored the budgeting process as the country achieved notable growth before the tech burst. For the years 2003 -2008 the country experienced myriad economic shocks warranting deficit budgeting with 2003 and 2004 being the highest hit due to recession of 2002 that escalated to 2004.
This implied a decline in discretionary spending by the government departments and social welfare entitlements; social security, Medicaid, and Medicare (William, 206). In terms of resource allocation, the US made tremendous milestones in ensuring optimality and spurring economic growth and development over the years. In the same fashion, the technology giants experienced positive producer price indices in commodity within the United States and overseas, with commodity for professional services, Information and technology, technical support and consulting services taking the centre stage. In the figure below, the aggregate consumer indices show a downward trend due to voluminous increase in technology and innovations and the federal tax credits for technology firms; improving on economies of scale to the producers and subsequent downward trend of the consumer index.
In terms of computing and internet services, the country recorded highest growth rates between 2002-2009 with the emergence of social networking sites that aided in the research and development departments of various sectors of the economy. Notably, before the tech bubble of the late 2000, the monthly consumer price index was high and with innovations taking the centre stage over the years, the downward trend indicate that the economic shocks, financial crisis and recession did not impact the country’s technology and innovations trajectory. The emergence, reinvention and expansion of tech companies such as Google, Apple, Microsoft, oracle, just to mention a few, who have geographical foot print in the US in paved way for timely innovation and adoption of technology in a myriad of day to day activities.
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