What are the problems in the current recession in the U.S?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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First, please note that the US is not currently in a recession.  In official ecnomic terminology, the recession ended in the summer of 2009.  What is now happening is a period of very slow growth.

There are many problems that are contributing to the current economy.  The most important of these seems to be a lack of confidence on the part of consumers and investors.  This has made it difficult for the government to do anything to get faster growth started again.

Generally, governments use fiscal policy to get out of recessions.  They spend more and tax less, which allows people to have more money.  The people then spend the money, businesses start investing, and growth occurs.

Right now, though, when government uses fiscal policy, consumers don't spend as much and businesses don't invest as much because they're not confident that growth will come.  This means that the government just gets deeper in debt without causing real growth.  This is the main issue facing the US in economic terms today.

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