Mainichi answers questions about the slow economic recovery in the United States and Europe, and the partisan political battle before the U.S. presidential election.
Q: Does it look like America’s high unemployment rates are likely to become the focus of next year’s presidential election?
A: The economic recession around the collapse of Lehman Brothers in September 2008 caused the most crippling financial crisis in postwar history and has resulted in over 8.5 million people losing their jobs in the United States. The unemployment rate, the percentage of people who want a job but can’t get one, hovered around the 4 percent mark in 2007 but climbed to 9 percent due to the financial crisis and reached 10 percent in October 2009. Thereafter, the pace of economic recovery has been slow and unemployment tops 9 percent most months. This month the unemployment rate fell to 8.6 percent, but the reason is believed to be that many unemployed people have stopped looking for work. This is no reason to be optimistic. Moreover, the average time spent unemployed, which increased to 40.9 weeks by November, is a remarkable problem.
Q: More than three years have already passed since Lehman Brothers, so why aren’t things getting better?
A: The slow pace of America’s economic recovery is a major cause. In 2010 the economic growth rate increased to 3 percent from negative 3.5 percent in 2009. The economy slowed in 2011, however, and current growth remains at around 1 percent. The outlook of the world economy is gloomy, considering Europe’s debt crisis, the fact that businesses continue to add fewer jobs and that local government administrations are being forced to reduce personnel. In addition, many blue-collar manufacturing jobs were transferred to overseas factories, and the software industry – in which fewer manual laborers are needed – is growing, so it appears difficult to increase employment.
Q: Is President Obama taking action?
After his inauguration in January 2009, Obama approved an $800 billion stimulus package that supported the economy and employment to avoid a crisis, but it had very little effect. First of all, there are still many people burdened with large debts from the housing bubble burst. Secondly, consumer spending, which accounts for about 70% of U.S. gross domestic product, is stagnating. Economic and employment recovery are shackled.
Q: What measures should be taken now?
A: During this time of financial crisis, the United States is spending too much money and the swelling national debt is up to $15 trillion. Obama is proposing $447 billion for employment, but his plan can’t be implemented with the two parties debating over tax increases and balancing the budget. Looking ahead to next year’s presidential election in November, political parties are clashing more severely and it is feared that politics will slow economic and employment recovery.
Answered by Osamu Hirachi from the North America Head Office
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