Day # 1 : Oct-2 : Topic # 1 : Category-Economics

[Ivy Aspire GMAT Prep]

Hi,

Category: Economics
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The recession that began at the end of 2007 was both the longest and
the worst since the Great Depression more than 75 years ago. By some
measures, such as the total jobs lost, it was as deep as the past
three recessions
combined.
It was a breathtaking moment of free fall in the private sector.
Capital
markets collapsed. Credit to businesses froze. Banks failed.
Foreclosures
soared. National output fell at rates not seen in decades. And
millions of
people lost their jobs.
Policymakers in the Administration, Congress, and the Federal
Reserve responded with aggressive, concerted actions to stop the
crisis.
Although there will likely be debates over the impact of each of those
responses for decades to come, few can dispute that the economic
climate
has improved substantially from the darkest days at the end of 2008
and the
beginning of 2009 in large part because of these actions. And the
Nation’s
economy did not fall into depression.
As gross domestic product (GDP) has been recovering, and as the
private sector has added more than 1.1 million jobs since the
beginning
of 2010, economic policy has shifted from crisis to recovery and
fostering
growth.
This year, the Economic Report of the President puts its primary focus
on the particular moment in which the Nation now finds itself—a moment
when the most important priority is reestablishing the primacy of
broadbased
growth to ensure the well-being of the American people and to keep
America the premier economy on earth.
Without question, growing our way out of the hole left by the crisis
will take a determined effort across industries, states and
localities, and the
Federal Government. Data from many countries over many years document
how painful the emergence from a deep financial crisis can be. The
challenges today have been heightened by the need to confront multiple
pressures, many of which are lingering effects of the crisis itself:
financial
woes in europe, continued weakness in the U.S. housing market,
depleted
state and local government budgets, and the need to improve the
Nation’s
long-term fiscal situation. And yet the American economy has now been
growing for more than a year and a half. The private sector, as of
this writing,
has added jobs for 11 consecutive months. the economy must grow
faster,
but certainly this is movement in the right direction.
The challenge will be to shift the focus of the U.S. recovery away
from the boom-and-bust cycles of the recent past toward more
sustainable
growth. In particular, from 2001 to 2005, the two overwhelming drivers
of
growth were increased consumer spending and investment in residential
real estate. Each was unsustainable. Consumption spending grew faster
than income, and the personal saving rate fell dangerously close to
zero.
The bursting of the housing bubble left millions of vacant homes and
lowered home prices such that investment in the housing sector is
still
struggling to recover.
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Courtesy:The Annual Report of the Council of Economic Advisers

Note: You can download the complete report from
http://www.gpoaccess.gov/eop/2011/pdf/ERP-2011.pdf

Have a nice day!

Thanks & Regards,
Siva Sankaran B