Economy Final essay
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United States of America has a population of about 313,847,465 people. The population of persons between the age of 16 and 64 is about 208,599,130. This is the active population which runs the economy around. Though the country is one of the world’s biggest economies the unemployment rate is still a national problem. Americans who live below the poverty line constitute about 14 percent of the total population. The country’s unemployed population stands to about 7.9 percent of the total population. America has a national dept that is about 69 percent of the country gross domestic product (GDP) (John, 2012). The country’s gross domestic product is $48,000 per capita. America has a good technology hub that includes good infrastructure and communication. Service industry is the biggest economic performer in the American market. Agriculture also performs relatively well but not to the standards of its full potential. Inflation rate by October rose to 2.16 percent. After identifying this entire loop in Americas’ economy the question arises if USA can be put back on its track? Ofcourse, there are measures that all Americans can take to solve this problem so that gradually the economy starts to improve and rise to its standards (John, 2012).
Public sector which has minimal returns to the economy such as education and health care services need be made more efficient to attract people from other countries thus earning the country more returns. Productivity in such sectors in a certain period will have returns and annual saving of up to one hundred billion to three hundred billion dollars. In addition, education tourism will earn the country relative high returns (Adam, Christian, 2011). Americans have to improve its education sector to embrace new technology to fit with the worlds needs. The result is to sell its professionals to other countries of the world. IT infrastructure improvements will also reduce imports of such personalities from other country. The country also needs to build a talent pool on line with the economy future plans. America is at risk of a decline of its technocrats. In aerospace for instance, 60 percent of its workers are aged over forty five years old. This means in twenty years time the sector will have a shortage sabotaging the economy. The country need to reduce barriers of immigration of professions in this sector in order to encourage growth and diversify of knowledge and skills.
The American infrastructure is not of up to date. It requires upgrading and renovation especially in areas hit by hurricane. Today the country is ranked twenty third in its infrastructure quality. The consequence of this is the decline in international investors who have relative contribution to the economy. Moreover, unfair business policies affect the country’s output. The country needs to formulate proper and fair policy to promote competition and to attack more investors in America. Taxation is the major pull back of America’s economy. The other setback is financing; most Americans are highly innovative but lack a starting capital. The government needs to set aside some amount for the purposes of promotion of innovation. It may not realize immediate returns, but it secures the future of America’s youth (Adam, Christian, 2011).
Global energy demand rises with the improvement in technology. America’s energy needs also rises with time. This needs will definitely rise in the future. Renewable energy source currently stands at 20 percent. The government needs to create incentives and proper policies for growth in renewable energy sources so to avoid the risk of food security and destruction of land resource. Wind energy and nuclear energy need to be given much attention among other renewable energy sources. Fossil energy drilling needs to be regulated since it is the number one environmental polluter and cost the government a lot of resources. The poor and developing countries demand compensation from the government because of global warming.
Other sectors such as tourism need to be given much attention because it contributes to national revenue. America needs to create a hub of the best quality in all sectors to set an example for other government and investors. Education, information technology and infrastructures attract other people to visit the state earning the state revenue. This will raise the GDP annually by a big margin.
All persons who have no definite payroll at regular intervals are considered unemployed. As indicated by the bureau of labor statistics the unemployment rate in august 2012 was at 7.9 percent of the total population. The figure though improving but there is an indication that as time passes by most Americans will not be on a definite payroll. Thus, the rate of unemployment is expected to rise. (John, 2012) To solve this menace and to secure the future of the generation to come there are various things that could be done. Small and medium size enterprises are the major job creators. Such firms have an edge of expansion thus increase its labor force. The federal and the state governments are required to ease taxes on the operation of such enterprises. This can be done through passing policies that favor emergence of such businesses. This will decrease government revenue through taxes at its implementation, but after a while there will be an increase in returns on the government budget.
Education sector can also create jobs for many American people. If Americans diversify its education to fit world's interest thus the epistemic class and professions will be exported to other countries to offer their services earning the country foreign income. The living standards of most citizens will definitely rise from the incentive, and this will marginally reduce the rate of unemployed persons in America. In addition, the curriculum needs to incorporate programs that involve interests and talents of its students. Sports men and women earn the country a lot of money, but that is not to the country’s full potential. Athlete wins to about 1,000,000 dollars on golden jackpot. This is just an example. There are a lot of prices attached games, sports, arts and films. If Americans curriculum give more emphasis of talents and student’s interests the country will be enjoying high returns and encouraging investment and tourism earning the country income.
Inflation simply means a lot of money that has a very minimal purchasing power based on consumer price index (CPI). In October 2009 inflation rate was 0.183 percent compared with today’s 2.16 percent. This is an indication that the inflation rate is on the rise but not by a large margin. This type of inflation is referred as creeping inflation (John, 2012). It is sometimes considered essential in an economy. This has a lot of impact in major economies such as America’s. To ensure that the inflation rate remains relatively low several measures has to be taken. The amount of money in circulation is one measure to control inflation. The Americans who earn more income should be taxed more than those who earn a small amount of money. This money can serve the other states activities. Moreover, the government should cut off its non essential expenditure in a fiscal year. This is because more public expenditure increases the rate of inflation. Production of scarce goods should be increased as this will not only decrease inflation rate, but also increase the number of employed persons. In addition, the scarce goods in American market should not be exported, and savings should be encouraged. This is because when spending surpasses saving it will lead to a lot of money in circulation.
The National Debt
The county’s national debt is about 16 trillion dollars. To settle this debt it has an implication that every citizen has to pay 20 percent in taxes despite the social class. This is an unfortunate measure and exploitation of the citizens. Alternatively the state may pay the debt by public money which will have a serious implication on the economy. The most appropriate way to curb this problem the government needs to encourage investments and increase in national output. This will increase government revenue collection thus filling the government budget deficit and saving other amount in bonds which will be used to pay up the national debt (Rochelle, et al, 2004). In controlling inflation it is mentioned that the government should control the amount of money in circulation. This money is also used in paying up the national debt.
Balance of Trade
This is the difference between the amounts of a country's export compared to its imports. In September the United States of American exported goods worth 187 billion dollars which is relatively low compared to goods it imported. The imports in the same month were 228 billion dollars worth (John, 2012). The main imports are petroleum products, medical technical equipment, machinery and vehicles. With gums and resins are increasing significantly. To cut off the deficit of trade the government need to encourage the indigenous firms producing the goods of America’s imports. For instance, companies such as Ford should be encouraged to produce more of its product to suit the Americans need and should sell their products locally at fair prices. Goods that are produced locally and are scarce should not be exported. Their exports will lead to more deficiency thus importing more at higher prices. This will narrow down the country’s balance of trade (Rochelle, et al, 2004).
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