Problems of Economic Situation in the US

Problems of Economic Situation in the US Current Macroeconomic Situation in the US Mar 26, 2018 in Economics Challenges Before Economic of the United States Current macroeconomic situation in the United States is not encouraging. Although, the government has undertaken numerous steps to rejuvenate the economy, generally, economy is not performing well. The United States has been experiencing huge economic challenges since 2007 economic downturn. Countrys national debt is increasing steadily. Experts caution that long-term fiscal situation in the US is unsustainable and if urgent measures are not taken, the future generation will be poor and heavily indebted. Contagion of the debt crisis in Greece and current Euro-zone economic impasse only prove that no economy is immune. Therefore, it is apparent that the United States must take urgent fiscal measures that will have long-term and short-term effects to improve the condition of economy and minimize the devastation that may accrue from massive national debt and unemployment (Fiscal Commission, 2010). The United States has numerous economic problems. However, the biggest challenge has always been heavy government spending. Currently, it is estimated that the United States annual budget is $13.4 trillion. This figure represents 24% of the countrys gross domestic product (GDP). This means that the government spends 24% more than the value goods and services generated in the country annually. This situation forces the government to borrow extra revenue to fund its recurrent expenditure. As a result, federal debt has risen drastically and currently stands at 62% of the countrys GDP. Escalation of the countrys debt was attributed to the involvement in Iraq and Afghanistan wars together with the credit crunch (Guell, 2011).