Analyse the economic objectives of the United States government and Essay

Analyse the economic objectives of the United States government and the effectiveness of its macroeconoic policies over the las three years - Essay Example Stagflation was once witnessed in the economic turmoil of the 1970s due to which economic imbalance was experienced. However despite the economic consequences of policies, we explore in this paper to what extent macroeconomic policies have remained successful or unsuccessful over the last three years in the light of economic objectives to cover unemployment, inflation, expenditure and balance of economic growth. Unemployment is the foremost macroeconomic indicator that within any economy irrespective of per capita GDP is responsible for deriving income from labor market earnings. With falling living standards and rising unemployment, the macroeconomic policies have failed to lower down the rate of unemployment as the rate of unemployment in 2007 was 6 million which in 2008 has risen to 9 million and is still keep on increasing during this economic recession. Avila & Usabiaga (2007) points out that macroeconomic policies have permanent or long-lasting effects on the unemployment rates of various US states (Avila & Usabiaga, 2007). However the impact of such policies and their persistence to our economy indicates that a high degree rise in unemployment is due to the restrictive demand policies that have become permanent component of the economy, thus leading to a higher natural rate of unemployment. This way the macroeconomic results have suggested that the prevailing tendency of U.S. state unemployment rates to fall from the high level was only witnessed after the first oil shock which also gives an indication that labor market reforms and stabilization policies have been implemented in the right direction (ibid). Policies regarding public finance claims that only the most central, national government can successfully manage US economys macro-economic swings and the resulting unemployment of labour and economic resources. The macroeconomics in this case does not held itself responsible for the inability to