Hung Chun Tung Donald
The state of the US Economy
The US has the largest and most technologically powerful economy in the world, with a per capita GDP of $48,450. The economy of the United States is a mixed economy, and has maintained a stable overall GDP growth rate, a moderate unemployment rate, and high levels of research and capital investment. It has been the world's largest national economy. As of 2012, the country remains the world's largest manufacturer, representing a fifth of the global manufacturing output. Of the world's 500 largest companies, 133 are headquartered in the United States. This is twice the total of any other country. The labor market in the United States has attracted immigrants from all over the world and its net migration rate is among the highest in the world.
However, United States still needs to face two daunting economic problems: persistent high unemployment and slow growth. These two things are still the dominant features of the US economy. Much of the drop in the official unemployment rate is due to unemployed workers giving up looking for jobs. There is wide agreement that any recovery is likely to be sluggish over the next couple of years. For example, Paul Krugman writes, "...the state of the economy remains terrible... Also, there is still a strong possibility, in the immediate future, of a new financial crisis and resumption of the downward economic spiral of 2008-2009. This danger comes from: the overhang of unpayable household debt, particularly in home mortgages, the global capitalist crisis, most immediately the European crisis, which can destabilize the US financial system, and will reduce the market for US exports, government policy which forced spending cuts at the federal, state and local level, cutting GDP by almost one-half percent in 2011, and are on track to do even more damage in 2012 and future years. Furthermore, slow economic growth may cause high inflation and...
Please join StudyMode to read the full document