US economic recovery – Is it indeed a recovery?By Randell Tiongson on September 23rd, 2010
This is a guest post by U.S. personal finance writer Jason Holmes.
Everyone is aware of the economic crisis of 2007-2009. US government had taken certain measures to reduce the devastating effects of the financial crisis. However, some of the experts are of the view that US has not been able to recover from the economic crisis. Read on to get an idea about the economic recovery of United States.
As per Trans Union, one of the major credit bureaus in US, debt on bank-issued cards has fallen down to about $4951 in June from that of April 2010. The credit bureau has further stated that the 90-year delinquency rate has fallen down to below 1%. It is about 17% drop from that of the first quarter of 2010.It indicates that consumers have learnt to focus toward debt reduction and have controlled their spending habit to some extent.
As far as housing market is concerned, home sales have reduced since the expiry of federal tax credit in the month of July, 2010. According to experts, if foreclosures continue to rise, then it may be the cause for another recession. Chicago based realtors have released a report, as per which, the home sales in July 2010 have reduced about 12.9% from that of June. New home sales that account for less than 10% of housing transactions have also been record lowest in June 2010. One of the major reasons for this may be due to the fact that a number of Americans are jobless and the homeowners are trying really hard to keep their properties. Out of the 1.31 mortgage loan modifications that started under the HAMP, 48% have been cancelled by July 2010.
Recent reports have revealed the fact that US exports have expanded to about $153 billion in the third quarter of 2010 which is the highest since August 2008. Imports have declined to about $196 billion during the same quarter. This indicates that US economy is recovering from the economic crisis.
However, according some experts, US has not been able to recover from the devastating effects of the economic crisis and the recovery rate is slow. As per experts, focus of the recovery has been toward Wall Street but not on small businesses or creation of new jobs. The experts point out that the stock market has recovered but not the economy as a whole.
Barack Obama has proposed to extend the tax cuts for everyone except the 2% rich taxpayers. As per the plan, the individual taxpayers with gross income more than $200,000 and couples over $250,000 will have to pay tax as per the higher rate.
Even President Barack Obama at a recent press conference has admitted that the economic progress in US is slow. He has mentioned that it’ll take some time to recover from the devastating effects of the economic recession (2007-2009). In order to boost growth, Obama has asked Congress to take up certain proposals. Apart from spending about $50 billion on the transportation infrastructure of US, the government should also extend the tax credit for research and development. Obama has also proposed to let the businesses deduct the capital investment cost in the year the expenditures are made instead of deferring it over a period of 20 years.
According to some experts, the Obama government should extend all the tax cuts for at least 2 years. It will favor the businesses that in turn will help reduce the overall national debt significantly.
Jason Holmes is a regular writer with Debt Consolidation Care and is also a contributory writer with other financial sites. His expertise is woven around various aspects of the debt industry and with his e-books he tries to impart to people the different situations and simple solutions to get out of difficult situations. Some of his works include e-books like ‘Credit Score The Quintessential Therapy for a Happy Pocket’, Take Creditors and Collection Agencies to Small Claims Court’ and, My Story- From Depression To a Smile’.