Economic Policy Recommendation Unemployment Essay

Economic Policy Recommendation Unemployment - Essay Example The crisis situation started during the financial crisis of 2007. With the announcement of bankruptcy of Merrill Lynch and Lehman Brothers the financial crisis situation started in 2007. These two companies were the largest financial corporations in the world during this period of time and with the shocking announcement by these two companies that there are going to call themselves as bankrupt have intensified the critical financial and economic future of the United States of America. This announcement has only adversely affected the American economic conditions and scenarios but has also negatively affected the related economic conditions of other countries of the world, such as UK and most of the countries of the European Union, Japan, Russia, India, China and many more (Artis, 2010, pp. 101-102). The financial crisis situation in the USA became more intense when the American government failed to take drastic steps to save the American economy and hence to reduce the intensity of t he growing unemployment and inflation in the country. The government failed to help these companies and other small and medium sized financial corporations in the country through financial assistances. ... intense when the American government failed to take drastic steps to save the American economy and hence to reduce the intensity of the growing unemployment and inflation in the country. The government failed to help these companies and other small and medium sized financial corporations in the country through financial assistances. The American government could not achieve the success of financial stability in the country during this time and this drawback of the American government reflected in the case of severe financial crisis in the country during this time (Katz, 2010, pp. 2-5). The crisis situation of the time emerged when the financial sector of the country and of the developed countries of the world have lost lot of money and financial assets in the market. This crisis situation caused the financial intermediaries of the world, in general, and large financial banks of America, in particular, to suffer from loss of their financial stability and financial assets in the market . In this crisis situation the loss the hedge fund in the share market of the country, which is still considered as the biggest and most financially powerful share market in the whole world, caused most of the large financial corporations to reduce their level of spending in order to raise the level of asset in the financial market. In this financial crisis situation the large financial business organisations, such as Merrill Lynch and Lehman Brothers, adopted the business strategy of reducing the work force of the company and to reduce the level of national as well as international investments. These financial business organisations started to sack as many people as possible within few months time to increase the potentiality of earning greater volume of money in favour of making the