How do Americans cope with declining or stagnant incomes? What are the responses from consumers, businesses, banks, etc.? Essay

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Updated: Dec 26th, 2023

It is possible to remember several situations when income of the US citizens declined or was stagnant. Remembering the crisis of 1930s, the reaction of US government should be stressed. People were affected by the changes in power and ideology. Great shifts in the government took place and many economic problems were solved by the government as its role in the country’s economy increased.

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A new wave of crisis with the similar characteristics took place after the World War II. That time government reacted to the income stagnation or even decline by “an active fiscal policy; providing an extended social safety net for low-income people; and regulating business activity” (MacEwan and Miller 39).

These measures were directed at regulating the total demand by means of regulating the taxation and government’s spending. Government did all possible to assist US citizens. After the Second World War the situation began to improve due to the international relationships which expanded and developed. It allowed the country to become stronger in the limited period and to make sure that situation is going to increase.

In summary, the following actions were done after the situation in 1930s’. Unionization was promoted, government increased its regulation of industry and finance, minimum salaries were established just for social security, to restrain unemployment. The banks were considered as the strongest ones, which are too big to fail.

Absolutely different situation has occurred in 2008. The declining and stagnation of incomes could not be reacted by the measures taken by the government in 1930s and after the World War II. It should be stated that “consumer spending declines as income remains stagnant” (The Associated Press).

This is the phrase taken from the title of the newspaper from November 30, 2012. It should be stated that the affect of the crisis remains up to now and the economy just starts to recover. The reaction of the population to the stagnation was a complete limit of spending.

People bought only the things of the first necessity and did not have an opportunity to spend more. Additionally, limited employment and high prices on gasoline also restricted people in their actions. Looking at the existed situation, it may be stated that international trade in this case does not support the country but creates higher competition at the market which is not a positive factor. Moreover, immigration creates additional problems at the labor market increasing the demand. Businessmen cautiously conduct their activities.

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The banks and the government try to react, supporting population, however, slow pace of economic growth may not be implemented. Therefore, it should be stated that the same actions of the government which were taken in 1930s’ do not work today. The economics has changed and if in 1930s’ government had an opportunity to affect the financial situation in the country, nowadays, it seems impossible.

The consumers limit their expenses, the banks are interested in returning their money, the government does all possible to secure both citizens and banks, however, it is a very complicated affair which is still successful, but not with the desired speed. Regulating some aspects of the economics, the fiscal economical situation remains as it is. Business in the current conditions cannot develop successfully (The Associated Press).

Works Cited

MacEwan, Arthur and John A. Miller. Economic Collapse, Economic Change: Getting to the Roots of the Crisis. New York: M.E. Sharpe, 2011. Print.

The Associated Press. “.” The Oregon. 2012. Web.

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"How do Americans cope with declining or stagnant incomes? What are the responses from consumers, businesses, banks, etc.?" IvyPanda, 26 Dec. 2023, ivypanda.com/essays/how-do-americans-cope-with-declining-or-stagnant-incomes-what-are-the-responses-from-consumers-businesses-banks-etc/.

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IvyPanda. (2023) 'How do Americans cope with declining or stagnant incomes? What are the responses from consumers, businesses, banks, etc.'. 26 December.

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IvyPanda. 2023. "How do Americans cope with declining or stagnant incomes? What are the responses from consumers, businesses, banks, etc.?" December 26, 2023. https://ivypanda.com/essays/how-do-americans-cope-with-declining-or-stagnant-incomes-what-are-the-responses-from-consumers-businesses-banks-etc/.

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IvyPanda. "How do Americans cope with declining or stagnant incomes? What are the responses from consumers, businesses, banks, etc.?" December 26, 2023. https://ivypanda.com/essays/how-do-americans-cope-with-declining-or-stagnant-incomes-what-are-the-responses-from-consumers-businesses-banks-etc/.

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