The unemployment percentage is more than 16% including the "Discouraged Workers" who were stooped looking for job or under employed. Th unemployed numbers increased from 8.2M in Q2 2008 to 13.9M in Q2 2011. This doesn't include the discouraged workers. The highest was 15.3M in Q4 2009.
In 1930, the unemployment was 24% which includes "discouraged workers". The present situation is heading towards that. In the last 16 months, there were 2 million jobs created and 8 million people last their job. This is one of the worst situation US is facing in the past few decades.
In addition, the US debt is now 14.3 trillion and the bills for payment is crossing the debt ceiling. Once the debt ceiling is reached, US treasury can not auction the Treasury notes, bills, and bonds. Either they have to default, in which case, consequence in US economy will be significant or they have to increase the debt ceiling.
US Congress has raised the debt ceiling TEN times in the last 10 years. In 2008 and 2009 alone, they have raised the debt ceiling FOUR times. US government has no money to pay the bills on August 2011. Before August 2nd 2011, they have to increase the debt ceiling.
Even if they increase the debt ceiling, they have to control their spending and increase the internal revenue otherwise they will reach the debt ceiling soon as their budget deficit is around 1.5 trillion every year.
They have to
- Cut in their gov. spending
- Cut their Defense spending
- Healthcare spending
- Do proper Tax changes
- Increase the internal revenue
- and more...
As the economic drop has happened over a period of time, the recovery will not happen over night. It will take few years for them if they work on right ways to improve it. If they still work on short term solutions, it is going to be a great depression for US.
Saravanan
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