Change of the economic weather by Martina Harvanova

Recession or just a slight domestic plunge? That is currently the most popular discussed issue round the U. S. economic environment. Is the world's largest economy weathering its tough period as it in fact seems because of the quite long-lasting difficulties on the market? Or is the recent situation just a small shaking of the otherwise extremely strong country? Treasury secretary Henry Paulson claims the situation occurs on its way to recover.Already the beginning of the 2008 foretold the possible scenario of this-year's position and evolution throughout the world's economy. Most of the analysts' forecast announced the "change of the weather". The decade ending with the year 2007 can be remembered as a period when everything went well and grew. Record global economic vigor contributed to the decrease of the inflation, rare troubles on the financial market as well as to the reduction of poverty in less developed countries. The majority of these optimistic reports already vanished and the future isn't predicted as great anymore. The growth rate on the level of 5 per cent is no long sustainable and the considerable number of developed countries will grow just about the rate of 2 per cent. The mentioned prognosis isn't apparently any surprising. The latest steps took, for instance, by Federal Reverse that cut interest rate, two-year-long housing downturn throughout the United States or tens of billions of dollar in losses of American banks tied to mortgage investments only confirm the forthcoming trend in the economy.Consequently, most of the economists agree that the situation is natural but, on the other hand, can be improved by particular actions of the state. If the market doesn't solve the problems itself, the state must help it and that is exactly what Paulson affirms: "I am optimistic that Congress will pass a growth package quickly enough to have a real impact on our economy."The U. S. economic growth slowed to a 0.6 per cent annual crawl in the fourth quarter of 2007, after a 4.9 percent pace in the third quarter must act as a exclamation mark especially for the government. However, the current situation isn't as frightful as it may seem on the first sight. We just need to get used that the living conditions are changing and that the welfare economics can't last forever.

related story: http://news.yahoo.com/s/afp/20080130/bs_afp/useconomypaulsonfinancepolitics_080130205424;_ylt=Aq0XhAWN8bO7SwkLmbZzD5Ss0NUE

by Martina Harvanova for PocketNews (http://pocketnews.tv)

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Edited by Federica Paddeu