In the length of a few pages there is no way to completely dive into the complexity of the massive economic powerhouse of the United States of America , we can though focus on the “tip of the iceberg” components of the United States economy. The United States economy is one that has been steadily but surely growing since detonating after World War Two. While the United States economy grew to be the strongest out of the other nations through the means of our broad industrial manufacturing foundation, in the present we concentrate much more on a service based economy.
The United States is in speculation, a free market capitalistic economy. Nevertheless, after the formation of gargantuan corporations of the Carnegie days and big steel days regulations had to be fabricated to hinder monopolies. In reality the United States does not have a truly free market. The United States is still predominately capitalistic in that companies are private organizations that preserve money and are not retained by the state. On the contrary the United States does have social welfare programs, that are clarified in extent later in this paper, that are evocative of socialism. The United States is a diverse market capitalistic society that establishes regulations, income and corporate taxes, and tariffs including regulating the interest rates.
The United States’ economy today is focused predominantly around a massive service sector, followed by a persistent manufacturing sector, a rejuvenation in energy and the substantial transportation market and the unfluctuating agricultural sector (Deutsch). With the rise in natural gas and oil exports the energy sector has played its part as a key role in the restoration to the 2008-2009 Great Recession.Additionally, The 12% enlargement of manufacturing has developed jobs and sanctioned for the exports of the US to stabilize or increase (Deutsch). The growth in chronic diseases and a stationary aging America had one advantage , the healthcare industry. Feeding the substructure of the service trade an unparalleled growth of a 135% three year growth rate in healthcare, according to Deutsch from Investopedia, balanced to the United States Gross Domestic Product boost. In the conclusion the United States economic sectors are persistent and are mostly recuperated from the Great Recession.
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With a Gross Domestic Product of 19.37 trillion dollars the United States economy is the world’s strongest and has been under endured changes through the last half century. After the Great Depression the United States vastly accepted an enormous increase in government functions and role in the economy. With FDR’s new proposition the government approved its new job as an employer, regulator, and safeguard for American Citizens. There have been positives and negatives for the growth in the governments magnitude.
The formation of safety nets permit for poverty stricken families a fallback. Nevertheless with the proportional increase in government size interprets to government outlay. As of 2016 the government disbursements add up to 3.54 trillion (see graph 1 at the bottom) according to insidegov. The government deficit has bubbled to a mind blowing amount of 552 billion down from a high in 2009 of 1.41 trillion, according to nsidegov. The 2016 United States revenue was budgeted at 3.5 trillion dollars (see graph 2) according to nsidegov. The United States government has been flowing a mix of a deficit and surplus for the bulk of its being but as time has advanced the deficit has magnified faster than revenue.
The American deficit has major consequences for the government and the people. The deficit raises the money the United States government itself owes to our own country. Us the American people must compensate higher taxes or reduce the budget deficit in order to begin leading the national debt. The United States national debt has aggregated to 20.59 trillion, according to the World Bank. The furthermore significant figure is the United States debt by percentage of Gross Domestic Product which is at 106%. That is where the United States runs the risk of becoming too obligated that the interest payments alone take up more of the United States federal budget. This is a malevolent cycle that must be shattered but will demand raised taxes or lower government spending or a combination of the two.
The United States has various ways in which it produces revenue vastly from taxes, trade, and the investments of the United States government in diverse markets. The individual income tax, payroll tax, and corporate income tax are the primary root of revenue for the United States. Today the current corporate tax rate is 35% (USD of Commerce) and people presume it is too high (see graph 3). The corporate tax, if too high, is a strain on companies making them more opt to move their headquarters from the United States or compensate employees less, and relocate manufacturing and work centers to different areas of the globe. This is crucial because the current administration assumes that the corporate tax rate is too high and impeding investment in the United States. The United States economy is still enduring to grow but at duller rates than many think it should be growing at.
The United States does have an extremely evolved economy but many believe the economy is currently hindered and not developing at a quick enough rate. Several of the disadvantages are surrounded around the costly labor market, automation, and the loss of manufacturing, and many regulations in place and the high corporate tax rate, as mentioned above. The legitimacy of some of these issues maintain valid. The United States regulations can occasionally obstruct profits by corporations but there are advantages such as environmental regulations.
What is more, the United States labor market is extremely costly with minimum wage spanning from the federal minimum of $7.25 an hour, to the numerous states that have larger wages such as Massachusetts with 11 dollars per hour. The United States economy has seen a large drop in manufacturing jobs as factories are outsourced to other more cost efficient labor markets. In the midst of out sourcing and automation, the substitution of human workers with technological counterparts, the construction of completed products has diminished in the United States. In the grand scheme of things the United States is moving toward a more particularized economy formidable in services and technology and innovation.
The United States of America is a colossal economy that constructs up a great portion of the world’s economy. The capitalistic foundation veers near free market practices with portions of socialism blending in. As the United States has moved forward the government has expanded its existence in the public and private sector and magnified its spending rapidly. There are many elements of that make up an economy of a country especially one as advanced and gargantuan as the United States of America.
References:
- “Central Government Debt, Total (% of GDP).” World Bank, data.worldbank.org/indicator/GC.DOD.TOTL.GD.ZS.
- Deutsch, Alison L. “The 5 Industries Driving the U.S Economy.” Investopedia, 29 Apr. 2015, www.investopedia.com/articles/investing/042915/5-industries-driving-us-economy.asp
- “Presidents Proposed $3.5 Trillion In Revenue.” https://Www.nationalpriorities.org/Analysis/2015/Presidents-2016-Budget-in-Pictures/Projected-Tax-Revenue-fy2016/
- “Top Statutory Corporate Tax Rate By OCED Nation, 2013.” https://Taxfoundation.org/Another-Study-Confirms-Us-Has-One-Highest-Effective-Corporate-Tax-Rates-World/.
- “Total Federal Spending 2015: 3.8 Trilliom.” https://Www.nationalpriorities.org/Budget-Basics/Federal- Budget-101/Spending/ .
- US Department of Commerce, BEA, Bureau of Economic Analysis. “Bureau of Economic Analysis.” U.S. Economy at a Glance, www.bea.gov/newsreleases/glance.htm.
