The US Bureau of Economic Analysis (BEA), a division of the US Department of Commerce, is in charge of generating economic statistics, such as data on the GDP, personal income, and global trade. By disseminating timely, pertinent, and reliable economic statistics, the BEA aims to advance understanding of the US economy. The GDP data provided by the BEA is regarded as some of the most precise and complete in the world (BEA, 2023). Economists and decision-makers use it to monitor economic growth and make predictions about the direction of the economy. This work was written with the aim of analyzing the financial performance of the United States and the state of Georgia in 2008-2009.
Gross domestic product (GDP) is a metric used to determine the total worth of goods and services generated in a nation over a specific period, usually a year. It is employed to evaluate a nation’s overall economic performance and to contrast the economic achievements of various countries (Mankiw, 2020). When comparing the standard of life of nations, GDP per capita, which is calculated by dividing GDP by the population, is frequently utilized.
Due to the global financial crisis, which resulted in a recession in several nations, GDP fell in 2008. A number of reasons, including the collapse of the property market, a high level of debt, and hazardous lending practices, contributed to the crisis. The US GDP shrank by 0.3% in 2008, foreshadowing a downturn until June 2009 (BEA, 2023). Real GDP is GDP that has been inflated; it is a measurement of the worth of the products that a nation produces, adjusted for the impacts of inflation (Mankiw, 2020). Real GDP stood at $14.4 trillion in 2008 and will reach $20.5 trillion in 2020 (BEA, 2023). As a result, relying solely on GDP can overestimate economic growth because it does not account for changes in the cost of living.
The 2008 global financial crisis had a significant effect on the economy both domestically and internationally. A collapse in the property market that resulted in a wave of foreclosures and a dramatic drop in housing prices set off the crisis. This, in turn, caused consumer spending to decline and banking system confidence to decline. Due to the failure of numerous banks and other financial institutions, governments all over the world were forced to intervene by providing bailouts and other financial system-stabilizing measures.
Another indicator of economic activity is national income (NI), which accounts for all payments made by citizens of a nation, whether they dwell there or elsewhere. Subsidies and indirect taxes are subtracted before increasing wages, rent, interest, and profits (Mankiw, 2020). A nation’s overall economic health can be gauged using its national income, which provides information about the total revenue earned by its citizens. The US had a National Income (NI) of over $14 trillion in 2008 (BEA, 2023). Without additional context, it is impossible to provide a more precise number. GDP measures the value of all goods and services produced inside a nation’s borders, in contrast to NI, which measures national income. NI also takes into account all earnings made by citizens of a country, whether they are based there or elsewhere. NI is viewed as a measure of the economy’s income, while GDP is thought to be a gauge of the economy’s output.
Population growth, increased productivity, and general economic expansion is some of the factors that have contributed to the increase in National Income since 2008. The US National Income has dramatically increased since 2008; National Income was over $19.5 trillion in 2020 (BEA, 2023). The economic fallout from the 2008 global financial crisis, which resulted in a recession and a decrease in GDP, was severe. GDP and National Income have since increased as a result of the US economy’s recovery. The recovery has been aided by the monetary policies of the Federal Reserve, government stimulus programs, steadily rising productivity, and population growth.
The amount of money that households have available for spending and saving once income taxes are taken into account is known as disposable income (DI). In addition to transfer payments like Social Security and unemployment benefits, it comprises revenue from wages, salaries, and self-employment (Mankiw, 2020). It is a crucial indicator of a household’s financial health and can be used to examine consumer spending trends and the state of the economy as a whole. Personal income increased by $167.1 billion, or 1.4 percent, while disposable income (DI) increased by $178.1 billion, or 1.6 percent, in May, according to the Bureau of Economic Analysis (BEA, 2009). Due to job losses and lower earning potential, disposable income fell during the 2008–2009 recession, which in turn caused consumer spending to fall and savings to rise.
Disposable income was significantly impacted by the 2008 global financial crisis. Numerous households suffered from job losses and lost purchasing power, which resulted in lower consumer expenditure and higher savings. Furthermore, government unemployment insurance and stimulus programs lessened the impact of the recession on discretionary income. GDP is a commonly used measure of economic activity and of the strength of a nation’s finances (Mankiw, 2020). However, critical aspects like income inequality, environmental deterioration, or the distribution of economic advantages are not taken into account by GDP. To overcome these constraints, substitute metrics like the Genuine Progress Indicator (GPI) and Human Development Index (HDI) have been developed.
The economy of Georgia State is broad and includes significant industries, including tourism, logistics, and agriculture. However, the GDP of Georgia was $368.7 billion in 2008; The state had a lower GDP per capita than the national average, at $33,848 (BEA, 2023). In 2008, the state’s GDP expanded by 2.2 percent, which was somewhat less than the national average (BEA, 2023). Georgia’s economic performance is typically seen as average when compared to other states. Although it has a smaller GDP per capita than some states, it also has cheaper living expenses and taxes, which may be more appealing to both businesses and people. The state’s economy has also been expanding gradually, with a low unemployment rate, both of which indicate that the state’s economy is generally in good shape.
In conclusion, the global financial crisis impacted the US economy in 2008, which resulted in a slowdown in GDP growth and a recession that lasted until 2009. A collapse in the property market that culminated in a wave of foreclosures and a dramatic drop in housing prices set off the crisis. This, in turn, caused consumer spending to decline and banking system confidence to decline. Due to the failure of numerous banks and other financial institutions, governments all over the world were forced to intervene by providing bailouts and other financial system-stabilizing measures. Due to the loss of jobs and diminished purchasing power brought on by the economic slump, consumer expenditure fell, and savings increased. Additionally, discretionary income dropped, which substantially negatively impacted society’s general well-being. The recession’s effects were lessened by the Federal Reserve’s monetary policies and government stimulus programs, but it took many years for the economy to recover fully.
References
BEA. (2023). US bureau of economic analysis. US Bureau of Economic Analysis. Web.
BEA. (2009). Personal income and outlays, May 2009. US Bureau of Economic Analysis. Web.
Mankiw, N. G. (2020). Principles of Economics (9th ed.). Cengage Learning.