An overview of US economy
The economy is the most important indicator to judge the internal living conditions and social development of any country. It provides information about the development of basic factors like health, education, happiness, infrastructure, living standard, etc. United States is one of the largest economies that has gained huge level of hold on the world economy and controls the world economy through its internal situation. The very interesting fact about the America’s economic growth is that America’s GDP is 26 % of the world’s total economic output. It is clear that US has created its powerful industrial structure and per capita income is also appreciable inside the country. The industrial development is tremendous, and the country has world’s maximum number of a billionaire. Currently per capital GDP of US is $49,800 which is very high. Further, the role of technology within the US economy is also remarkable. Technologically the US has seen highest advancement and development that is sufficient enough to grow the economy as compare to other countries. The external economic factors put the positive impact at each another and lead towards the growth of the economy and the internal economic environment. The US economy is mostly based upon the capitalist economy structure, and the ideology suggests that the privatization is the basis of growth and development of country’s economy. The government has their intervention into only health sector and transportation area. The country has maximum number of private companies who are successful and have earned huge profits all across the world. Even the government buys the required products from private companies. This economic ideology is highly success in US and ensures the proper flow of income and effective utilization of natural resources. The decision making is in the hands of private firms in the US. Here the private companies faced the high level of leverage of such kind of economic structure in expanding their business and taking the decisions appropriately. The technological areas have brought down the revolution in entire world and America has become the pioneer of such advancements. The aerospace, computers, communication and information technology, medical, military, etc. these are certain areas where US have surpassed all other countries and have effectively contributed well into economic development. These sectors have become the foundation of country’s rapid growth in oversees as they expand their business and fulfill their needs. IN 90’s US has transformed their entire economy as the industrial set up was on the peak and the companies were performing well at international level. While 90’s the growth rate was extremely high as the economy grew by 3 4 percent every year. The residents of the country get their own home that was the positive indicator for US economy.
After 1975, the household income has been increased by 20 %, and it is something that creates confidence among the people towards the US economy. But another fact is that the people who had less technical skills and educational qualifications they face trouble in establishing their growth in the era of technology. They found obstacles in facing pay rises and other benefits at work place. It determines the unequal distribution of wealth and employment opportunities. At the same time, the US economy has faced huge level of growth in literacy ratio. To meet out the requirement of technology people started to get educated and it just raises the level of employment within the country. Thus, the technology works positively in the long run and negatively in the short run. But its negative consequences are negligible as compare to the positive results. Unequal distribution of wealth is another factor that could be realized in US economy over the recent past or industrial development time. The people who don’t have good education the employment opportunities are less for them, and it created less earning opportunities. Now the contribution or the role of oil is very significant in US economy. It is to acknowledge that 55 % of total consumption is the oil only. The America imports such huge amount of crude oil for the consumption of residents. The rise in the prices of oil just create a burden on US economy and reduce the GDP growth rate. During 2001 to 2008 the petrol prices were not so stable, and it just create trouble for US economy to handle the situation. At the same time, the financial crisis took place in the entire world and America faced two major problems. One was dampening the housing market, and other was related to the rise in oil prices. It just created the trade deficit and most importantly the value of the dollar was depreciated as compare to other currencies. The fluctuations become very common scenario, and it creates trouble in handling the economic structure. Another problem that America started to face is related to high import ratio as compare to export. The US has plenty of natural resources, but most of them have been utilizing for inside consumption. There was very less export, and it just stuck the internal flow of money and capital. The infrastructural development was on the peak that is another indicator for healthy economic structure. Still the infrastructure development of US is appreciable and increasing year on year.
The bankruptcy of banks like Lehman Brothers was the worst era for US economy where they found trouble in managing the mortgage prices, investment failures, credit failures and so on. At that time, US faced a high level of issues with respect to their economic structure. The reason behind the economic recession is the socially huge spending habits of people and low saving ratio. It was the actual scenario of US that people earn less, but they spent more than their earning. For the same purpose, banks issued more number of loans, and the amount was so high thus it creates the negative flow of money within the economy and it just lead towards the economic recession. Other than this the expenditure upon the security of the country from outside attack is something that has affected the US economy negatively. The country spent billion dollars every year to protect their territory or boundary. Developing the military equipment and weapons has become a priority of US government, and it just affects the US economy negatively. Various plans have been implemented with respect to ensuring the low level of the trade deficit. The fiscal stimulus for the amount of 787 billion dollars was something that was passed by the president to be used for social welfare and economic structure repairing process. It helped in generating the job, revenue for the country through various processes. The economic structure come into trouble as the US government put their leg into wars with Iraq and Afghanistan and were in search of terrorist groups and their leaders. It also affects the GDP growth rate in recent past. The impact of terrorist attack took place at world trade center could be realized after a long period. The US government faced lots of issues with Iraq and Afghanistan in resolving the problems. It has been estimated that by the 2011, the total cost for wars was near to 900 billion dollars which are very huge amount from economic growth perspectives. Improving the health care sector is another prioritized area for concern for US government. To stabilize the US economy and to pass the benefits of American citizens, the government has put various efforts. However in future there are certain problems which could be faced by the US government like lower income people, unemployment, low saving ratio, rapid increment in the pension and medical cost of old age population, energy-related issues, problematic relations with other countries, pressure to create employment, budget deficits etc.
Very latest economic data represent the consumer price index at stabilized rate of .2 whereas the unemployment rate is 5.5 percent. Further, the GDP rate is also increasing with an increasing rate and has been reached to 16.77 trillion US dollar. Currently, the US government needs to improve their international relations and have to focus on basic economic components or sectors. They need to grow the agriculture sector and need to increase their export ratio of natural resources. The infrastructure development is required to be maintained within the national economy. Funding to an international organization is required so that the interest could be received, and this long term investment can strengthen the base of US economy. Ahead the openness within the economy is required to be minimized so that the benefits of selling goods internally could be transferred to local manufacturing firms. Other than expenditure on war and acquiring the weapons there is need of spending on social welfare and creating the investment opportunities. The US economy is still very powerful and highly diverse economy, and they have control on world’s economy. The private companies of US have created their reign all over the world and have put a hold on world’s industrial development. They need to perform well on the continuity basis and need to contribute for national welfare rather than individual growth and development. Thus, the US economy has brighter future if the government removes their attention from wars or spending on manufacturing military equipment and spending excessively on security matters.