Is the US economic recovery sustainable?

The financial world is full of expectations or uncertainties as you may want to define it. We are currently facing a new expectation (or uncertainty?) around the US economic recovery prospects. How reliable is the fact that the US will make its way back? We will state some points which presume that US economic recovery will be sustainable.
First off, we should consider the current state: we are technically out of the recession. The National Bureau of Economic Research has officially stated the end of the recession dating June 2009. In addition to that, the US GDP has shown during 5 consecutive quarters a positive growth. This shows that US seems to be back on the track.
Furthermore, the US must be seen in a worldwide perspective. This means to take a look about the trade volume the US holds with its major commercial partners. Evaluating from October 2009 to October 2010 and according to the US Trade Commission, the US shows an increase of 25.4% in imports and 22.5% for exports. This rate of increase in trade evidences that the US is experiencing an active and growing economic dynamism at the same time that they find the appropriate parties to trade with in order to support their economic reactivation.
Moreover, the US government and the FED do not have any plans to withdraw the stimulus packages. They will actually reinforce them. At www.recovery.gov , you may find how as of September 2010 the US government has injected into its economy around USD 251.5 billion generating around of 670 000 new job positions. They have focused in education, health, transport and energy: all of them are strategic sectors for any economy. In addition, the FED keeps in mind to hold the interest rate between 0% and 0.25%, and they have repurchased its securities for USD 1.7 trillion. They still have plans to continue with the quantitative easing programme up to June 2011 by acquiring additional securities up to a lump sum of USD 600 billion. In this way, the FED provides enough liquidity in order to reactivate employment, consumption and investments. FED measures made possible a total of 151 000 new job positions during last October in the private sector. The US government and the FED are paying close attention to the economic recovery indeed.
It is important to point out that in addition to all of these economic efforts, new regulations come again into the game in order to avoid a similar collapse as the one recently suffered. The recent approval of the Dodd-Frank bill sets the new restrictions about leverage and excessive risk taking from financial institutions. These new regulations basically set new mechanisms to monitor the economic activity of the financial institutions under a principle which sets something like “the riskier you get…the more regulated you will be”.
The economic recovery can be understood as a vector. We already have the magnitude given by the actual experience of the economic recuperation and the supporting role of the US government and the FED. This process has taken investors to take a look again to riskier assets such as shares especially. The appropriate direction is set by the new regulations which will diminish the chances to suffer from a similar collapse as we experienced during 2008 and 2009. The vector is properly composed. Uncle Sam will be able to walk again.

Special thanks to Pablo Campos, Mario Torres, Carolina Fernandez and Carolina Martinez because their support to this article