The United States economic crisis which had devastated the nation over the last decade particularly the second half is hardly even over. Those who are hopeful however, are positive that the debt crisis in America is almost done due to significant changes recorded over the last three years.
Terrorist threats had been listed as one of the major reasons behind the American debt crisis with the reign of terrorism ignited by the 9/11 attack on 2001. It was commemorated for its 10th year anniversary last year. The 9/11 attack had caused the U.S. to spend on military and intelligence projects beyond what it is earning. The deficit had affected financial and business institution and had been responsible for an all time high recorded debt in the United States.
With the business and financial sector also affected by the debt crisis in America, unemployment rates continue to rise. Currently, the rate is at 8.9% with about 14 million Americans currently without work and rely upon monthly government assistance checks.
Last year, the national debt of the U.S.A. was at $14.3 trillion dollars with a deficit of $1.65 trillion. With this figure distributed on the current population, it means every American owes $46,000. The highest recorded deficit was at $223 billion last February 2011. A remarkable 14% increase from the previous year’s budget deficit.
The Government's Response
Barrack Obama’s government had responded to this by cutting the yearly budget by $6 and minimizing daily expenditures. The amount itself saved is not even 1% of what the current national debt total is.
The government also proposed to save on daily funding by the same amount of $6 billion. Although this was only suggested as a short response last year, it had been in effect since the debt problem rose to over $72 billion. Every day, the government actually borrows an estimate of about $5 billion just to be able to cover expenses including that of the military and unemployment privilege program. This means about almost half of every dollar on the budget is being borrowed just to be able to sustain a day.
The Role of China and Japan
Although the world debt crisis affects not only the U.S. but other huge nations as well, there are countries especially in Asia which are not swayed by as heavy as the blows which the U.S. suffers from. These include China and Japan which owns the largest U.S. dollar reserves as of the moment. China holds almost $2 trillion dollars while Japan has about $800 billion.
Japan can be technically crossed out in the list after going through the havoc of tragic earthquake and tsunami in March. China on the other hand still recorded progress in terms of economic improvements. In the second half of the decade past, China gained a growth of up to 11.2% while the U.S. only recorded a 3% growth.
These statistics prove that the real picture of the debt crisis in the U.S. is far from over. There may be outstanding improvements noticeable but these are not enough for the nation to completely be out of debt just yet.