The US is facing a number of challenges in its economy since the great recession in 2009. The growth of the US economy since the recession has been quite slow resulting to more challenges such as joblessness. The other challenges facing the US are high levels of inflation, unemployment, and the high cost of living. To address some of these challenges loose fiscal and monetary policies are necessary because of the low economic growth. The labor force was growing at about 1 percent per year in the 1990s with the productivity estimated at a growth of between 1 and 1.5 percent every year. Currently, unemployment is rising at a high rate making it difficult for several people to live a comfortable life.

President Obama has tried to expand the government spending and regulation, but the effort are thwarted by the opposition in congress. Stimulation of the economic growth by using monetary policies is not bearing fruits as the economy continues to underperform despite the fact that The US is one of the world’s producer of natural gas. There is generally a weak economic recovery and poor response to foreign policy challenges especially the Middle East, Ukraine, and southern US border which has contributed to little support for the current president.

There is rampant corruption in the government with high levels of government spending and the expansion wich has led to high levels of political favoritism. Some issues such as uneven protection of property rights are posing a challenge to the judiciary. Recent reports show that the public debt is higher tan the c annual production with the government spending taking a third of the GDP. There is also high taxation with the individual income tax rate standing at 39.9 percent and the corporate at 35 percent.

The government has imposed over 150 new regulations which have boosted the US over 70 billion dollars in such sectors as the pipeline, the labor m, market, and at the state level. The subsidies the government used to give such as in the Agriculture, health care, and renewable energy are affecting the economy negatively as the increased rates take a huge chunk of the budget. The open markets are also suffering as the average tariff stands at 1.5 percent and other tariffs on clothing are quite high. The financial market is doing well, but the 2010 Dold-Frank Act insists on increased federal regulation, which can result to financial crises in the future.

Inflation is a great concern in the US as the prices of basic commodities rise uncontrollably with many citizens unable to buy them. The government can use tight monetary policies such as raising banks’ lending rates and selling securities in the open markets. Raising taxes and reducing government spending can also address inflation as the government can use the money to subsidies tea sic commodities such as food for its citizens.

The most appropriate monetary and fiscal policies for the US are the Expansionary ones to facilitate the economic growth in general. The policies should aim at increasing money in the economy such as lowering interest rates, lowering reserve requirements, and buying government securities in the open market. For the fiscal policy, governments should lower taxes and increase spending which increases money to the consumers. The other ways that the government can use are checking deposits to regulate the money in circulation.

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