The US economy is in deep recession penetrating in all the sectors. More experts say that this is the worst situation since the great Depression. According to Better Markets, the latest global economic crisis cost the USA $12.8 trillion. At the same time, the entire world has already spent nearly $11 trillion to eliminate the consequences of the crisis.
What awaits the USA?
Americans Cross Poverty Line
The bankruptcy of Leman Brothers is believed to have started the global economic and financial crisis in 2008.
Some experts say that the real damage is bigger than $12.8 trillion. Another negative factor is that the US GDP is expected to shrink by $7.6 trillion during the period from 2008 till 2018.
American households have been affected seriously since the crisis broke out. In 2009, 17.5% of the US citizens were unemployed. The average household income in the USA has dropped by 40% since then. For the first time in 50 years, 46.2 million Americans have found themselves below the poverty line. The living standards are far from improving: 9.3 million people have no medical insurance while 15% of the population (46 million people) cannot do without free meal tickets.
The situation becomes even gloomier if to consider the fact that the US public debt has already exceeded $16 trillion (In 2007 it was $9 trillion).
Experts say that the USA will close this financial year with a $1.2-trillion budget deficit.
At the same time, the US authorities are concerned about the fact that China is the biggest lender for the USA (i.e. the biggest holder of US bonds). They say this is a powerful weapon, which can be used anytime. If China sharply reduces its holdings of US bonds, this may seriously affect the US and global economies.
Dept Presses US Economy
Obviously, such an immense debt is a heavy burden. In advance of presidential elections, Obama’s rival and his team are speculating on the current economic situation in the USA, blaming Obama’s administration for costly reforms.
According to most experts, the US public debt is a serious problem for the entire global economy.
The US authorities should immediately take efficient steps to reduce the public debt. Otherwise, we may see a wave of tax hikes and social spending cuts, which will definitely lower the living standards in the USA.
