The Current State Economy Essay Example for Free

The Current State Economy Essay It is known that the economy is intensively damaged and that it needs to be restructured. The current fiscal policy that are in place are good, but measures must be taken to avoid a crash of the market, get the unemployment rate down, and stimulate the economy in the hopes of increasing the gross domestic product and bringing about a surge in the aggregate demand. Although it may take some time for all of these events to take place, this is what needs to be done to get the economy to rise. The consumers and government must also do their parts in order for this economy to rise above the recession it is in now. The primary root cause of the current recession and economic crisis is largely in part due to the huge increase in the issuance of subprime adjustable-rate mortgages and the collateralized debt obligations that they made up. The amount of subprime mortgages issued in 2005 and 2006 increased drastically, while the issuance of prime mortgages actually decreased. Basically, banks loaned money to people who would obviously default on those loans. People bought houses with these loans expecting housing prices to increase, but that didn’t happen. Although, this was the route caused it is not the only reason we continue to be in a poor state. Below you will find the over view of our current economy. The current economy expanding or contracting is contracting. Our current prime rate is 3.25% The current interest rate on credit cards is 15.4% The current unemployment rate is 9% (2011 est.) and 9.6% in (2010 est.). The unemployment, youth age 15-24 total 17.6% that includes male 20.1% and female 14.9%(2009). The current inflation rate is CPI measures inflation rate 2%. The current Gross Domestic Product (GDP) are: GDP (purchasing power parity) $15.04 trillion (2011 est.), $14.82 trillion (2010 est.) $14.38(2009 est.). The data are in 2011 US dollars.