The American economy is looking quite desolate at the moment to many people across the nation. What occurred in the U.S. is that banks were letting people with bad credit get mortgages on houses and pay a fixed rate for a certain number of years. After those years were up their payment rate was raised extremely high and the people could no longer pay these loans, which lost billions of dollars for the banks across the United States. What is essential now for the U.S. to do is to stimulate the economy so that it can boost straight back up again. On Tuesday January 22nd, 2008, interest rates were dropped .75%, which is unheard of at one given time. They plan to drop it even more some time next week after their meeting. The idea is that with interest rates drop, the people will be out spending their money instead of saving it in a bank, this will help boost the economy. Another plan to help make the economy boost a success is that the government is going to be giving out money to U.S. taxpayers. “Sources on Capitol Hill and at the Treasury Department said the plan would send checks of $600 to individuals and $1,200 to couples who paid income tax and who filed jointly. People who did not pay federal income taxes but who had earned income of more than $3,000 would get checks of $300 per individual or $600 per couple” (CNN). If Americans are receiving free money, they are obviously going to go out and spend it, which in turn will help get everything moving again. Another aspect that is worth noting is that many U.S. residents can potentially lose their jobs; if companies are producing less product, then more workers will be getting laid off. “The economy added just 18,000 jobs in December, far below analysts’ estimates of 60,000 additional jobs. Annual job growth has fallen to its lowest level since 2004, and the unemployment rate ticked up to 5 percent” (NY Times). If U.S. residents become unemployed then the economy will begin to fall apart and all hope will be lost. It is essential for companies to not fire their workers because if mass amounts are let go, then the economy will pay the price. If they U.S. were to fall into recession than so will the rest of the world, this issue would hurt them all. What we need to do now is to focus our energy on keeping the economy out of recession.

CNN.com. 2008. Taxpayers would get checks under economic stimulus plan. 24 Jan.
2008.

Nytimes.com. 2008. Fears on Inflation and Jobs Give 2008 a Stumbling Start. 24 Jan.
2008.