Transcript Financial Crisis 2008

The Economy in Crisis
Eco 352
Fall 2012
Some Economic Indicators
• NYS unemployment
– December 07: 4.7%, August 12: 9.1%
• U.S. unemployment
– December 07: 5.0%, August 12: 8.1%
• U.S. inflation
– December 07: 4.1%, November 11: 1.7%
Source: Bureau of Labor Statistics
Unemployment Rate
average unemployment rate, 1948.01-2.12.08 = 5.79%
11
10
9
8
7
6
5
4
3
2
50
55
60
65
70
75
80
85
90
95
00
05
10
Measures of Recession Depth and Duration
Depth
Duration
(months)
Real GDP
Real GDI
Unemployment
Rate
Average, 1948-2001
10
-2.05
-2.20
2.85
Current Episode
16
-1.73
-0.36
3.67
20-22
-2.83
NA
4.60
43
-26.50
-26.70
24.60
Current + SPF Forecast
Great Depression
NOTE: Depth measures the average percent change from peak to trough for real GDP and real
GDI and the average percentage-point change from trough to peak for the unemployment rate.
Changes in real GDP and real GDI during the Great Depression are based on annual data.
SOURCE: Kevin L. Kliesen’s calculations based on quarterly data. Economic Synopses,
Federal Reserve Bank of St. Louis, March 23, 2009.
GDPR
12,000
10,000
8,000
6,000
4,000
2,000
0
50
55
60
65
70
75
80
85
90
95
00
05
GDPR
12,000
11,600
11,200
10,800
10,400
10,000
9,600
00
01
02
03
04
05
06
07
08
U.S. NATIONAL DEBT CLOCK
The Outstanding Public Debt as of 20 April 2009 is:
$ 1 1 , 197, 726, 249, 988
The estimated population of the
United States is 306,038,582, so each
citizen's share of this debt is
$36,589.26
The National Debt has continued to increase an average of
$3.84 billion per day since September 28, 2007!
Source: U.S. National Debt Clock, http://www.brillig.com/debt_clock/
U.S. International Indebtedness (Net U.S. asset position as a % of GDP)
Source: Calculations by Eshragh Motahar based on data from the Fed and the BEA)
10
0
-10
-20
-30
-40
-50
-60
55
60
65
70
75
80
85
NETASSETGDP
90
95
00
05
Universal HealthCare
• $104 billion per year could implement the
Obama healthcare plan
• The above is equal to 15% of U.S.’s 2008
military budget
(Source: Paul Krugman, “Kealthcare Now,” The Newy York Times, 1/30/2009, citing research from
The Commonwealth Fund.)
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US military spending accounts for 48 percent, or almost half, of the
world’s total military spending
US military spending is more than the next 46 highest spending
countries in the world combined
US military spending is 5.8 times more than China, 10.2 times more than
Russia, and 98.6 times more than Iran.
US military spending is almost 55 times the spending on the six “rogue”
states (Cuba, Iran, Libya, North Korea, Sudan and Syria) whose spending
amounts to around $13 billion, maximum. (Tabulated data does not include
four of the six, as the data only lists nations that have spent over 1 billion in
the year, so their budget is assumed to be $1 billion each)
US spending is more than the combined spending of the next 45
countries.
The United States and its strongest allies (the NATO countries, Japan,
South Korea and Australia) spend $1.1 trillion on their militaries combined,
representing 72 percent of the world’s total.
The six potential “enemies,” Russia, and China together account for
about $205 billion or 29% of the US military budget.
Source: http://www.globalissues.org/article/75/world-military-spending#USMilitarySpending
U.S. population: 4% of World population
U.S. Military Spending vs. the Rest of the World
More Economic Indicators
• Median household income, adjusted for
inflation, lower in 2007 than in 2000