Unites States current macroeconomic status Research Paper

Unites States current macroeconomic status - Research Paper Example to zero and in effect risk inflation or raise interest rates in the near future to increase the economys productive capacity (productivity) but at the risk of furthering its recessionary tendencies or forces. The Fed has tried all the monetary tools at its disposal but the economy simply would not budge. The high unemployment rate fell from a high of 9.5% (14 million jobless) to about 9.0% (12.8 million out of work) in December of last year. It further improved to only 8.3% unemployed in February this year, with 227,000 non-farm payroll jobs added (Bureau of Labor Statistics, 2012, p. 1). Most of the new jobs were in professional and business services, health care, hospitality, mining, leisure and manufacturing. A fiscal policy the government is pursuing right now is the signing into law the JOBS Act (or Jumpstart our Business Startups) which is a fancy name for incentives intended for small businesses to more easily raise capital through crowdsourcing (Futrelle, 2012, p. 1) as it en deavors to clear away red tape and hopefully create more new jobs in the process. The Fed is a bit apprehensive about stoking inflationary pressures but the threat of a double-dip recession is a much more real risk and so the Fed is embarking on third-part installment of its quantitative ease program (QE1 & QE2) and dubbed as â€Å"Operation Twist† to bring long-term interest rates lower, but downside is it might again lead to a moral hazard and a financial bubble (Curtin, 2011, p. 1). This monetary policy of the Fed to increase the money supply is consonant with all the other pump-priming activities of the government through its fiscal policies of reducing taxes and increased government spending for certain public infrastructure projects. However, those chronic budget deficits of state governments had nullified most of the benefits of this program, as they in effect struggled to contain their deficits from large expenditures and lowered tax revenues. This was shown in August of 2011