Name : Lawt Aung
Student ID : W 4066692
Webster
University
Spring term / 2013
FINC-5000, Finance, Section E8
Instructor name: Dr. Geoffrey VanderPal
2007/08 Financial Crisis’s implication on Current and Future US economy
1
Abstract
This paper explores published books
that report on the causes and effects of the financial crisis that took place
in 2008 and what the US Federal government and Central bank’s actions’ impact
on the process of US economic recovery. The paper mainly examines the financial
crisis inquiry commission’s (2011) report on causes of financial and economic
crisis in the United States and Peter D. Schiff‘s (2012) book that clearly
explains the current US economic situation and how the actions taken by the Federal
government and Federal Reserve will likely result the potential bankruptcy of
America. Moreover, this paper studies many published articles and newspapers
that cover a broad range of the present economic conditions, the monetary
policies that are being used by the Federal Reserve as to stimulate the economy
to grow, and the possible changes of the policy regarding the sustainability of
the US economy. However, the concepts of newspapers and articles vary based on
the individual authors’ perception of the information and data provided by the
governmental organizations. In addition, this paper also discuses about news,
information, and economic related data from the website.
2
Table of Contents
Page
Title
page …………………………………………………………………………………………..
1
Introduction…………………………………………………………………
………….. ………… 2
The
causes of financial crisis and lessons from it………………………………………………….. 3
The impact of financial
crisis on the current US economy………………………………………… 5
The
future of US economy in term of current monetary policy and economic
condition…………. 6
Summary…………………………………………………………………………………………… 8
References………………………………………………………………………………………….. 9
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Introduction
Numerous studies have reported that 2008
financial crisis was the result of increasing credits availabilities in the
United States provided by the budget surplus developing nations around the world.
Whereas, other studies suggested that the crisis was the outcome of insufficient
regulations toward the financial banking sectors. However, many economists and
experts have come to agree to blame on the Federal Reserve’s nearly zero
interest rate policy as the only significant factor that played a big role in
causing housing bubbles and sub-prime mortgage crisis that eventually led to
financial crisis. In fact, there were several other factors reported by the
government agency that contributed to the causes of the crisis. For instance,
the expansion of shadow banking system as the turning point of the financial
crisis because all the big banks called “Too big to fail” banks that were
allowed by ineffective regulations and system to make riskier investments
regardless of the consequences, moreover; the financial innovations invented by
the system such as, collateralized debt obligation (CDO), Mortgage backed
securities (MBS), and Credit Default Swap (CDS) were the ticking bombs for the
entire US economy, according to the experts.
Basically, 2008
financial crisis had caused the most severe damage to the US economy as well as
the global economy after the Great depression in the 1930s. However, not many
people had learned lessons from the crisis and few people are willing to
contribute to the process of economic recovery. In fact, the recovery process
could draw US economy into a deeper recession by the fact that Federal Reserve status
of maintaining quantitative easing policy (QE) and zero interest rate policy
(ZIRP) that enable banks and financial institutions to borrow money with nearly
zero interest rate. Consequently, big banks started by the Fed policy, giving
out more loans and investing on the riskier assets for higher return as they
did during the crisis.
As a result of
that, the housing prices are increasing again and turning into bubbles that
would eventually have to burst. When the bubble bursts, all America big banks
would inevitably have to line up for default and the Federal Reserve would have
to keep printing money in order to bail out all the big contagious banks. However,
it is unlikely that Federal Reserve would be able to bail out all the banks, so
it would probably have to allow some particular banks to fail just like it let Lehman
brothers fail in 2008. As all the present big banks are becoming more interconnected
again, chances are that if one fails, others will follow suit.
Meanwhile,
quantitative easing policy, which was also designed to increase inflation rate,
affects the dollar price, which in turn, will make the price of commodities go
up. In this case, American people are actually paying more to buy the
necessity, that’s why; millions of Americans are relying on the Food Stamps and
the number of people depending on Food stamps is increasing. Although the
unemployment rate officially indicates only 7.6% of the population, in fact, the
real rate is far more than the number used by the policymakers.
In regard to debts,
America national debt has always been increasing and Federal budget deficit gap
is dramatically getting bigger from year to year as borrowing increases. On the
other hand, American households’ debts currently amount to trillions of dollars
as people depend on the borrowing rather than earning. As a matter of fact, the
situation is unlikely to get better as it doesn’t appear as a serious problem
for the US economy as long as the rest of the world still wants to lend their
money to America. But once the moment that the rest of the world stops flowing
their money into America, this moment will be the time for US economy facing
the Great depression which would possibly be much severe than the Great
depression in the 1930s.
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In fact, there
are ways to improve economic growth rate and protect the economy from
experiencing another financial debacle. Yet it would take solid desire and
intention of the Federal government (Politicians) and Federal Reserve (Policymakers)
to take necessary steps that would be painful for short-term, but better for
long-term. As a matter of fact, according to the economists and analysts, the
politicians don’t want to clean up the mess created by their predecessors and that
they have to play the same game which makes them more concerned about winning next
election, so chances are that the economy would have to suffer the harsh pain
in the long-run with current government policy and monetary policy. In reality,
the US economy is in the midst of recovery process and financial crisis can
occur at anytime if the policymakers are stubborn enough to change the
ineffective policies.
The Causes of Financial Crisis and lessons
from it
The undeniable factors that
caused 2008 financial crisis were the bursting of housing bubbles and the
Sub-prime mortgage crisis. Apparently, the housing bubble was created by easy
credit availabilities with the Federal Reserve’s zero interest rate policy at
which people could borrow with artificially low interest rate. Yet there were
other factors that contributed to the causing of financial crisis. For
instance, the failure of regulators to prevent big banks from taking more risk than
they could afford to was one factor that backfired the crisis and the
corruption business of Credit rating Agency was another.
According to the Financial Crisis Inquiry Commission
report (2011),
“The financial crisis of 2008 was not a
single event but a series of crises that rippled through the financial system
and, ultimately, the economy. Distress in one area of the financial markets led
to failures in other areas by way of interconnections and vulnerabilities that
bankers, government officials, and others had missed or dismissed” (P-27)
In the report,
the commission interestingly found out that the financial crisis was avoidable
disaster caused by widespread failures in government regulation, corporate
mismanagement and heedless risk-taking by Wall Street. Eventually, the report
identified the fact that there were systematic breakdowns of accountability and
ethics when it comes to business in terms of profitability and bonuses. Financial
Crisis Inquiry Commission Report (2011) (P-XXI)
To explain the overview causes of the
financial crisis, the starting point of the crisis was the result of using
Federal Reserve zero interest rate policy that was designed to stimulate the
economy. However, it turned out that the Fed policy did not help the economy to
grow efficiently, yet it created the housing bubble due to the fact that banks got
access to the excessive credit loans from the rest of the world with low
interest rate. As the banks could borrow money from the Fed with nearly zero
interest rate, it took more risk in order to earn higher return. As a result,
banks were encouraged to give loans to people whose standard were in no income,
no assets (NINA) level. On the other hand, Mortgage lenders were forced to help
people to get houses that they actually could not afford to pay back.
Consequently, the housing price skyrocketed as people took loans and put them
into the real estate market.
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In fact, the
politicians established the notion of high risk investments on the real estate
market with their policy to increase home ownership while their administration
taking office. They supported the lobbyists such as Fannie Mae and Freddie Mac which
were also known as Government sponsored Enterprises to take more risk on the
securities related investments through shadow banking systems which amounted to
trillions of dollars. As mortgage lenders themselves were backed by the
government, they guaranteed and bought the securities which were associated
with high risk. They knew that the securities they bought and guaranteed were
toxic assets even for themselves, yet they took the risk in order to generate
higher return for themselves regardless of the consequences as they knew, in
case liquidity squeeze occurs, government’s bail out would rescue them from
falling into bankruptcy.
On
the other hand, with the failure of the regulatory agencies such as Security
Exchange Commission (SEC), to prevent banks and financial institutions from
taking high risk, Wall Street bankers, financial institutions, and Government
sponsored Enterprises were able to create financial innovation that expanded
shadow banking system. As shadow banking system where derivatives and repos
were traded became bigger, banks and financial institutions relied heavily on
the system for their firms’ liquidity and short-term capital source, which in
turn, made them less worried about their large exposure to securities
investment.
In
the case of Credit rating Agency’s corruption business, FCIC’s report concludes
the failures of credit rating agencies were essential cogs in the wheel of
financial destruction. The three credit rating agencies were key enablers of
the financial meltdown. Financial Crisis Inquiry Commission Report(2011) (P-xxv)
Basically, they made it possible for security issuers to sell their risky
mortgage backed securities (MBS), collateral debt obligation (CDO),and Credit
default swap (CDS) by rating with flawed models which gave all the securities
triple A. As a result, investors and financial institutions trusted the
agencies and invested huge amount of money which later resulted loses and drove
some of investment banks such as Bear Stearns to be taken over and Lehman
brothers into bankruptcy; moreover, American International Group (AIG), which
insured securities worth trillions of dollars that exceeded the total assets of
the firm, was able to survive with the help of government’s bail out.
In
fact, due to the credit rating agencies’ triple A rate on the mortgage-related
securities, investment banks and financial institutions doubled their exposure
to security investments by borrowing money from over- the counter derivatives
market. As a result, almost all the security issuers’ leverage ratios increased
to 30: 1 on average that resulted many banks found liquidity shortage which was
one of the reasons that led banks to fail and financial crisis to take place in
2008.
Regarding the lessons to learn from the
crisis, government and policy makers should have changed the monetary policies
that did not actually contribute to the recovery process after the financial
crisis. In fact, it should not be forgotten that Federal Reserve zero interest
rate policy, which is still being used, created bubbles and its cheap money
allowed bankers to make risky investments that eventually led to the crisis. Therefore,
Fed Reserve and policy makers should get rid of the zero interest rate policy
as soon as possible to make sure Wall Street bankers and financial institution
do not return to the situation of the post-financial crisis with the Fed money
printing policy.
6
The
FCIC concludes the combination of excessive borrowing, risky investments in the
mortgage-related securities, and lack of transparency put the entire financial
system on a collision course with crisis.
Financial Crisis Inquiry Report (2011) (P-xix). Thus, it is important
to regulate banks from excessive borrowing and make banks more transparent as
to prevent the recession. Nevertheless, Security and Exchange commission should
impose laws and regulations that maintain accountability and ethics in order to
protect the market.
In
particular, the credit rating agencies, according to the report of FCIC, the
financial crisis could not have happened without the rating agencies. Their
ratings helped the market soar and their downgrades through 2007 and 2008 wreaked
havoc across the markets and firms. Financial Crisis Inquiry Commission Report
(2011) (P-xxv) Therefore, it is essential that the rating agencies use unbiased
rating models when it comes to rate the financial stability of the firms. As investors
rely on them blindly, they should consider they are obligated to provide the accurate
information in term of rating firms. By then, the contribution of the
regulatory agencies and policy makers will have a positive impact on the
current as well as the future of the US economy.
The
impact of the financial crisis on the current US economy
In order to
cover the big picture of the current US economy, it is reasonable to start from
the national debt which has ever been increasing and now the total debt is over
$16 trillion dollar. (US
national debt clock (2013), Retrieved from http://www.brillig.com/debt_clock/) Since the dot-com
bubbles and September 11 terrorist attack took place in the United States, the
US economy has suffered the slow down and in 2008, the US economy has
experienced the greatest financial crisis in the history, which resulted
bankruptcy of large investment banks, millions of Americans unemployed and
transform the country into the greatest debtor nation in the world. Since then,
the government and Federal Reserve have been trying to boost the economic
growth to get out of the recession. Yet the US economy has not experienced the
real recovery until now.
During the financial crisis, the housing price
has plummeted due to the sub-prime mortgage crisis in which millions of home
owners defaulted on their mortgage loans. Soon after the crisis, the housing
prices have been literally increasing as the interest rate remained low. However,
some economists believed that the increase in housing price shows that
investors are confident about investing in the real estate market again. In
reality, the Fed’s quantitative easing policy is encouraging people to spend
money and buy houses that make the housing price consistently grow as increase
in demand drives the price higher.
As
Fed kept printing money to stimulate the economy started in the late of
November 2008 shortly after the financial crisis as to increase the inflation,
there was no incentive for American people to
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save
money ever since. Thus, people started to spend borrowing money that they don’t
actually earn which increased the household debt amount to trillion in the
current US economy. As a matter of fact, when people do the savings, the
inflation and government tax eventually wipe out their savings. Therefore;
fewer people do the savings and economists and experts condemn the current
Federal Reserve monetary policy that creates cheap money and discourage people
to save for their investments.
The
following year after the financial crisis took place, the effect of the crisis
has spurred unemployment rate increase from 9.3% in 2009 and 9.6% in 2010. However, in 2011 and 2012, national
unemployment rate has dropped to 8.1% and in 2013; it came down to 7.6%.
Figure below indicates the unemployment rate;
Labor Force Statistics from the Current Population Survey
(Bureau of Labor statistics (2013), US
unemployment rate, Retrieved from http://www.bls.gov/cps/)
On the
other hand, higher inflation rate has become one of the policymakers’ goals before
and after the crisis as it played a major role in the history of US economy. Before
the financial crisis, the inflation rate has surged to almost 6%, then, shortly
after the crisis, the inflation rate has sharply plummeted to the deflationary level.
Since then, the US Federal Reserve started to use the quantitative easing (QE)
policy to increase inflation rate. In 2010, the inflation rate increased to
around 2% by the Fed’s quantitative easing policy (also known as monthly bond
purchasing program) which was kept using until June 2010 when the economy was
believed to start improve, however, the program resumed in August 2010 with
Fed’s decision to make the economy grow robustly.(Harding. Robin. (2010), Quantitative
Easing Explained. Financial Times, Retrieved from http://www.ft.com/intl/cms/s/0/69e8c92c-e758-11df-880d-00144feab49a.html#axzz2YqxQWO3B)
8
Regarding the economic development in term of
GDP growth, before the financial crisis, the US economy maintained the annual
GDP growth of 2%, however, during the financial crisis, especially in 2008, the
GDP growth went the opposite side of the growth chart with a significant negative
growth rate, yet after the following fiscal years of the financial crisis, the
GDP gained annual growth rate between 1% and 3 %.
According to the Federal Reserve Monetary Report
(2013),
“Real GDP is estimated to have increased at
an annual rate of 3 percent in the third quarter but to have been essentially
flat in the fourth, as economic activity was temporarily restrained by
weather-related disruptions and declines in some erratic categories of
spending, including inventory investment and federal defense spending”. (P-5)
In fact, the impact of financial crisis has
been enormously dominating the growth of current US economy and financial development
in various sectors. Despite the policy makers’ efforts to reduce the
unemployment rate and increase the inflation rate, the target rates still
remain far from reach. However, the Federal Reserve keeps trying to achieve its
goal with its quantitative easing policy and zero interest rate policy.
Therefore; these policies are likely to stay in the US economy longer than
expected, which in turn, encourage people to borrow more money and spend the
money that they otherwise could not earn and that can bring consumer debt much
more than current debt of 2.8 trillion. (Consumer Credit Outstanding (2013), http://www.federalreserve.gov/releases/g19/Current/)
The
Future of US economy in term of current monetary policy and economic condition
The notion of real recovery taking over the US economy is not fully
completed yet as there are news and articles that keep
accusing the Federal Reserve’s monetary policy of trapping the country into a
deeper recession. However, the Federal Reserve Chairman Ben Bernanke keeps
saying the economy is recovering with the Fed’s policy and the country’s GDP is
growing as the real recovery taking place. Despite the claims made by the Obama
administration and the Fed Chairman Ben Bernanke about the recovery, the GDP
annual growth is 1.7% and unemployment rate is unlikely to fall from 7.6 %.
Nevertheless, Obama administration’s budget cutting policy established in the
first quarter of 2013 has caused the unemployment rate increase to a certain
extent, yet it is somewhat contributing to the US economy by planning to reduce
the deficit.
9
Figures
below show the United States GDP growth rate and unemployment rate.
United States Unemployment Rate (2013), Graph
illustrates the unemployment rate from (Jan/2012) to (July/2013), Retrieved
from http://www.tradingeconomics.com/united-states/unemployment rate
United States annual GDP growth rate (2013),
Graph illustrates the annual GDP growth rate from (2008-2012) http://www.tradingeconomics.com/united-states/gdp
10
In particular, the increase in US national
debt and household debt is indicating whether or not the economy is recovering.
As over 16 trillion national debts exceed the country’s GDP and the consumer
debt is approximately 17% of the GDP, it is obvious that the US economy is not
fully recovered yet. However, the economy is recovering on its own, and the
unemployment rate is falling on a quarterly basis. On the other hand, the
inflation is approaching to its appropriate rate. Yet, the problem is,
ineffective monetary policy is still unchanged. Although, certain monetary
policy and government policy have helped the economy to recover from the
recession period by increasing inflation rate, it is a good time to replace the
policy with a better one. In fact, there are ongoing problems caused by the Fed
monetary policy and government policy in the US economy. For instance, the zero
interest rate policy is still making the savings unattractive for American
people and encouraging people to borrow money that they cannot pay back. Regarding
the government policy toward savings,
Peter D. Schiff (2012) described it as
follow;
“Government rewards borrowing
(the biggest tax deduction for most families is the deduction for mortgage
interest) but often punishes saving (by taxing investment gains and interest on
CDs and savings accounts)”. (P-12)
It is true that government policy was
designed to punish the savings and this policy is exactly what the government has
been using since Bush administration and now it is being used by Obama
administration. And now, Government keeps urging people to go out and spend
their borrowing money. And people who save money are recognized as unpatriotic
and government takes almost all the capital gain earned from savings.
Regarding Federal Reserve monetary policy,
the Fed monthly bond purchasing program so called Quantitative Easing (QE)
policy, along with zero interest rate policy is creating bubbles in the stock
market as many people invest in the market with the cheap money they borrow
from the government. In fact, if the quantitative easing policy is used to
reduce the deficit, it’s a beneficial for the economy, but unfortunately; it is
being used to create troubles for the economy by eliminating the interest rate
and increasing debt. Besides, due to the availability of cheap money made by
the Fed policy, housing prices are rising up again and derivative markets are
also expanding and used commonly for capital and liquidity source for firms
again. However, this doesn’t seem like a problem for now, but once the housing
price drop and interest rate rises, it is unlikely that markets will remain
calm, and many people tend to end up experiencing massive loses just like in
2008 and find themselves in a debt hole.
On the
other hand, for bond markets with zero interest rate policy, by the time
interest rate rises, many investors, including financial institutions will
encounter huge loses, however, as they got their investments insured by the
insurance companies, they are safe. So the biggest losers will be the insurance
companies which are backed by the government. When this happens, the situation
will be pretty much the same with the situation of pre-crisis era.
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In term of rules and regulations, banks and
financial institutions are being imposed with some new rules and regulation regarding
their investment exposure on the securities, but they are still allowed to
trade in the derivative markets and guarantee the securities investments. Yet,
the unprecedented thing is that Federal Reserve is buying securities from the
investment banks and other financial institutions. Therefore, former
troublemaker banks are getting their position back and starting to do the same
businesses that led to the financial crisis in 2008. For instance, Giant
mortgage lenders, Fannie Mae and Freddie Mac have gained their positions to
issue and guarantee mortgage-related securities that mainly caused the recent financial
crisis.
On the other hand, large banks are also trying
to take the position of “Too big to fail” status rather than maintaining their
solvency, so that they can be assured that government would provide them with a
bailout package if something happens to them. As the US government itself is
insolvent, it is unlikely that government would be able to bail out all the
banks if they default. Big banks rely on the government, whereas, government is
the greatest debtor in the world. Interestingly, experts made the statement
related to the subject, “If the banks default, the government could probably
bail them out, but if the government defaults, who’s going to bailout the
government?” In fact, allowing large banks make risky investments by giving
them hope that they will be rescued by the government could lead the economy
into a deeper recession in the future.
As the global economy is unstable and
fragile, and many countries are still in the recession, especially the European
countries that used to be the creditor nations of the United States, the
policymakers of the largest economy should be careful about the condition of
their own economy. On the other hand, China, the second largest economy in the
world and the largest creditor nation of the US is in the midst of credit
crunch and experiencing the economic slowdown in 2013. So the problem is, if these
creditor nations come and ask for their money from the government through bonds
(IOUs), the US government will have to print money to payout the debts because
it is the only way government can do to payout the debts. The more they print
money, the higher inflation there will be and the value of the dollars will
drop. Once the value of the dollar drops significantly, the dollar will lose
the Global Reserve Currency status. As a result, the world will get rid of the
dollar, the commodity price will shoot up and the US economy will collapse
again with the devaluation of the dollar price. However, as many countries’
central banks are also printing money in unison, this scenario might sound, but
it is important to note that this can happen unexpectedly.
In
reality, the future of US economy is not as bright as it is said by the
policymakers. In fact, the situation could be getting worse if the necessary
steps are not taken by the government and policymakers. The present US economy seems
stable in the short-term with annual GDP growth rate 1.7%, yet it is unlikely
sustainable for the long-run with the current government policy and Federal
Reserve monetary policy. However, Obama administration’s budget cutting policy
is contributing to the deficit reduction. Yet, government and policymakers
should change the strategy and policy to boost the economic growth for the
long-run.
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In
particular, government and policymakers should taper the quantitative easing
policy before it is too late, let the market determine the interest rate, and
encourage people to save and borrow for productivity. On the other hand, it is also
important to regulate the shadow banking system as it was the main cause of the
recent financial crisis. Once all the rules and regulations are fixed and American
people will become productive like they used to, and the tendency is that the
future of US economy will experience substantial growth that will result the
improvement in the standard of living. In the future, the nation will probably become
prosperous with the productivity of its citizens.
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Summary
The implications of the
financial crisis still influence the current and future US economy as similar
situations overwhelm the entire economy. Although, many people learned great
lessons from the crisis, majority of people fail to apply what they learned into
the present condition of the US economy and unwilling to contribute to the
recovery process. On the other hand, Short-term oriented policymakers refuse to
take the short-term pain for the sake of future, that’s why; they do not take
the future into consideration. In fact, one of the main causes of financial
crisis, lack of corporate social responsibility, accountability, and ethics
among financial institutions and regulatory agencies, is threatening the
economy with a severe recession again. As regulatory agencies are still in the
same shape with the same rules and regulations toward the securities
investments, it is likely to support the potential crisis in the future.
Nevertheless, along with the regulators, troublemakers (lobbyist bankers) are
being favored by the politicians to take advantage of the volatile markets.
Whereas, the economy is not fully recovered yet and the existence and
once-again-expansion of shadow banking system can create problems at anytime
for the economy. In the shadow banking system, unregulated derivatives market is
becoming the major capital source for the firms again and it’s getting larger
and it puts trillions of dollars that probably exceed country’s GDP at risk. Regarding
the Federal Reserve monetary policy, if the Fed is going to keep using
quantitative easing (QE) and zero interest rate policy, the commodities price
will become higher in term of dollar. As a consequent, US household debt rate would
dramatically increase because of the increase in commodities and necessities
prices. However, as mentioned above, central banks around the world are
printing money at the same time, it is unlikely that US economy will experience
hyperinflation. But, there is another problem with the policy that US economy
will still have issues with capital flowing out to foreign countries that can
result capital shortage among institutions in the near future. As a good
example of the issue, before the financial crisis, capital shortage and
liquidity issues were the reasons that caused Bear Stearns to be taken over and
Lehman brothers to file on Bankruptcy. In term of government policy, it is the
appropriate time that Obama administration introduced the budget cutting policy
in government spending in the first quarter of 2013. However, as it is
affecting the employment rate, the policy should be carefully examined about
whether or not it is helping the recovery process. Moreover, government
policies are supposed to be more concerned about reducing national debt and
balancing trade deficit as these issues could become major problems for the
economic growth. In particular, government policy should stop encouraging
people to borrow by imposing no incentives for the borrowers. At the same time,
create incentives for savers as they contribute to the economy by reducing
their debts. In regard to regulatory firms, government should impose laws to
protect agencies from doing criminal business activities. Nevertheless,
regulating banks and financial institutions from enlarging their exposure to
securities investment is also important as a protection of the recession. On
the other hand, it is the right time for Federal Reserve to taper its
ineffective quantitative easing policy and zero interest rate policy for
economic recovery process. Instead of maintaining these ineffective policies
and borrow money from the rest of the world, the Fed should seek for strategic
plan to boost the economic growth. As a result of that, US economy will be
fully recovered and will likely experience the greatest prosperity in the
future.
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References
The Financial Crisis Inquiry Report, (2011),
Final Report of the national commission on
the causes of financial and economic crisis in the United States,
xxi-xxviii, 27-48.
Federal Reserve Monetary Report, (2013),
Recent Economic and Financial
development, monetary policy, 5-15
Peter D. Schiff, The Real Crash, (2012),
America’s coming bankruptcy-how to save
yourself and your country, 12-30
Harding. Robin, (2010), Quantitative Easing
Explained, Financial times, Retrieved from
US National Debt Clock (2013), National Debt over
16 trillion and it has continued to increase an
average of $ 2.42 billion per day since September 30, 2012, Retrieved
from
Bureau of Labor Statistics (2013), US
unemployment rate, Retrieved from
Consumer Credit rate (2013), Consumer Credit
Outstanding, Retrieved from
United States GDP (2013), US Annual GDP
growth rate from (2008) to (2012),
Retrieved from
United States Unemployment Rate (2013), US
Unemployment Rate from (Jan/2012) to (July, 2013)
Retrieved from
http://www.tradingeconomics.com/united-states/unemployment-rate
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