Economy of the United States
A reduction of the economic freedom of the United States to 76% is said to be the result of factors such as reduction in fiscal, monetary and labor. Although the United States is still considered as one of the greatest countries in the world and in North America, the flop in the economy of the U.S has resulted to the continued flop in comparison to other countries since 2000. This shows that factors such as the interference with entrepreneurial development and the tendency towards cronyism have the potential of affecting not only the economy but also the perception of the American economy.
In addition to this, poor policy choices also have great impact on the economic development of the nation. In recent times, there have been un-programmed terminations of various cuts in payroll taxes and income which were there previously hence making it difficult to predict fiscal freedom. On the other hand, averting the economic downfall can only be achieved through the formulation of policies aimed at achieving economic recovery in the near future.
While the national government continues to grow fast economically, this growth continues to hamper the growth of the federal government through increased expenditure at the national level (Vatter 110). It can thus be concluded that the U.S has not fully recovered from the 2008 recession. Despite having a high GDP per person, most of the market decisions in the U.S are still left to the private sector which makes decisions without much flexibility.
The availability of technological advancement in the U.S market has also led to the development of a two-tier labor market characterized by income disparity as well as differences in other benefits (Taylor et al 3). Policy changes such as the Troubled Asset Relief Program and the fiscal stimulus bill have subsequently been established to initiate economic recovery (CIA World Fact Book para. 1).
Despite various efforts towards economic recovery, the economy of the U.S has been improving very slowly for the past few years. However, various changes such as reduction in the cost of housing and improvements in the conditions of the labor market have been experienced. In addition to this, the labor market has continued to be steady even after the deregulation of some industries. On the other hand, the effects of inflation remain unmuted as there has been failure to stick to a particular monetary policy, a factor which has led to deformations, particularly in long term risks of inflation. The challenges that have been facing the U.S economy are trying to be addressed through various methods.
The main policies that are currently guiding the operation of the U.S economy are the government and the fiscal policies. The government policies are based on Keynesian economics. Monetary policy as used within the context of the U.S economy refers to the management of money circulation by the government. In this system, if the available funds are too much, price hikes are imposed by the government to help as a form of currency devaluation. On the other hand, when there are fewer funds, the government adds value to the currency through price reductions. In this way, the money circulating within the economy is maintained within a range. The fiscal policy refers to the alteration of the way the government manages the national currency through expenditures.
CIA World Fact Book. The United States Economy Profile 2013. Retrieved from http://indexmundi.com/united_states/economy_profile.html
Taylor, Richard, David Kern and Jerry Crawford. “Economic Policy and the Current US Recovery.”
Vatter, Harold. History of the U.S Economy since World War II. Armonk, NY: Sharpe, 1996. Print.
The article above on Economy of the United States is a summary of an economics term paper written by one of our professional writers. As a leading custom writing services provider, our writers are some of the highest rated by students. If you want assistance in writing a term paper on a topic of your choice get in touch with us here.