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Economic Recovery

Timothy F. Geithner has a piece on the status of the economic recovery. Being the secretary of the US treasury, his piece would be the optimistic view of the treasury but still one worth reading. Our economics tutors can assist you with both macro economics and microeconomics if you are looking to understand the economy in more detail. His highlights from the piece are:

  • Exports are booming because American companies are very competitive and lead the world in many high-tech industries.
  • Private job growth has returned — not as fast as we would like, but at an earlier stage of this recovery than in the last two recoveries. Manufacturing has generated 136,000 new jobs in the past six months.
  • Businesses have repaired their balance sheets and are now in a strong financial position to reinvest and grow.
  • American families are saving more, paying down their debt and borrowing more responsibly. This has been a necessary adjustment because the borrow-and-spend path we were on wasn’t sustainable.
  • The auto industry is coming back, and the Big Three — Chrysler, Ford and General Motors — are now leaner, generating profits despite lower annual sales.
  • Major banks, forced by the stress tests to raise capital and open their books, are stronger and more competitive. Now, as businesses expand again, our banks are better positioned to finance growth.
  • The government’s investment in banks has already earned more than $20 billion in profits for taxpayers, and the TARP program will be out of business earlier than expected — and costing nearly a quarter of a trillion dollars less than projected last year.

Despite this optimism, I am glad to hear him say that he aware “that these signs of strength in parts of the economy are cold comfort to those Americans still looking for work and to those industries, like construction, hit hardest by the crisis.”

Click here to read the entire article in the NYT.