The Economist has recently summarized, in great macro fashion, what it believes to be the greatest problems facing growth and economic stability in the United States. The speedometer to most economic problems relates back to Americans happiness and the future outlook, which is at recent all time lows. Throughout history, when the grimmest times are upon, the US always seems to recover and spur growth. Some instances in the past include “the inflation ridden late 1970s or the fear of competition from Japan that marked the jobless recovery of the early 1990s”. Both these periods in history rebounded with abundant growth. When 3 out of 4 Americans do not have faith in our political system (Congress) it is time for our leaders to take a step back and reevaluate the plan.
Recent statistics exhibit increasing market stability and decreasing unemployment, which are all great signs of economic recovery, but many Americans have yet to get the same impression. Although all of our problems are not due to cyclical and short-term worries portions of this angst can be attributed to rising gas and stagnant housing prices. The major concern is founded in the long-term negative outlook “about stagnating living standards and a dark future in an economy slow to create jobs, saddled with big government deficits and under threat from China”. Americans need to focus more energy on recovering from the recession than looking at what is coming up from behind. The global economy is so intertwined that when one of our major allies is growing we will also reap the benefits. The Economist also notes that many of these emerging threats do not have “a Silicon Valley… or Ivy League”, substantial proof of US economic vantage.
The outcome of long-term growth and happiness lies in how we react and alter some of the lagging areas of our current economic/political system today. Problematic areas of concern include the corporate tax structure, the national budget deficit, and job growth. All of these directly affect the economy but tie back to our political structure. To increase corporate growth and the amount of federal revenue generated their needs to be some incentive to bring American companies operations back home. This will not only benefit all through taxes collections but help job recovery and growth, potentially spurring the upswing needed to put the country back on track.
The level of federal debt is at a staggering 90% of GDP. Globalization provides larger open economies, such as the US, a cushion from initially feeling the repercussions associated with this issue. But, at the current rate we are heading it wont be long before the cushion wears off and substantial changes to American lifestyle will be inevitable. As US tax paying citizens, we are all in this together and need to create a plan to limit spending, increase amount of revenue generated, and budget our countries future more carefully. The greatest power we have to affect these changes is our vote.
The most substantial consideration affecting happiness relates to job recovery and growth. In recent years, the recession has claimed millions of careers and left many Americans structurally unemployed. Structural unemployment has been prevalent through the Euro Bloc for years but seems to becoming the norm in the US, having the “smallest fraction of prime-age men in work and in the labor force than any other G7 economy”. Our legal system/prisons, drug policies, and education are the largest contributors leading to increased structural unemployment. This abnormal decrease in the work force will certainly affect future growth and economic benefit for many years to come, unless changes occur now.
Print Edition, Leaders. “Angst in the United States: What’s Wrong with America’s Economy? | The Economist.” The Economist – World News, Politics, Economics, Business & Finance. Economist, 28 Apr. 2011. Web. 03 May 2011. <http://www.economist.com/node/18620710>.