Table of Contents
A clear recovery of the US economy started off in the half part of the 2009. This is before losing a degree of impetus in the second and third quarter of 2010 that saw the country in an inflation period. According to Euler, 2011, the government of US, "insolvencies unquestionably helped end the surge in business insolvencies at work since 2007 and which rose to a record 17- year peak in Q3 2009".
Otherwise, the current microeconomic in the last quarter of 2010, has show a genuine trend rehearsal with a more stabilization shown at a quarterly level. This is through cases of insolvencies falling by around 7% contrary to the range that has been previously forecasted of 10% drop. This was projected after a massive support measures that the government offered in the recovery program of the economy. This was through offering durably accommodating monetary policy to upgrade the economy.
According to Euler, 2011, the 56,000 cases that has been posted insolvencies in 2010 was above the average of past thirty years. This signifies a small drop in the number of cases according to chapter 7 which offers the procedures widely used and that correspond to business liquidation. It is also noted that larger decrease of the business that benefits from reorganization under chapter eleven. Otherwise, in 2010, the scale of biggest business insolvencies in terms of their turnover was lower than the previous year.
What the U.S. Congress and the Federal Reserve should do
To ensure that there is continued economic recovery in 2011 and ensure that insolvencies decrease, such relative weak places as house consumption and mostly dependent places as real estate and construction should be well looked at to check inflation and recession (Euler, 2011).
They should ensure that they do not poke in the market to ensure that the seemingly double bottom recovery is avoided to ensure a V shaped one. This is through keeping the interest rates exceptionally low for an extended period of time.