Tuesday, June 7, 2011

United States Economic Growth

The US is the worlds largest economy, and fluctuations in its success have a major impact worldwide. In recent years United States economic growth has been hit by the credit crunch and increased competition from other countries such as China, but there has been recent positive activity so there is hope that economic expansion can resume. The US economy is largely based on freedom of trade, low regulation and low taxation. This has encouraged new business growth and innovation in science and technology. The US is home to more millionaires and billionaires than anywhere else on earth, and is also home over a quarter of the largest companies in the world.

The US economy is further strengthened by its geography and natural features. It is rich in minerals and has vast areas of fertile land perfect for farming. There is extensive access to the sea, which has greatly assisted economic growth in the US history. Due to mass immigration through the 19th and 20th century, the US has been able to sustain a large workforce, particularly with relation to lower tier jobs. And because of the size of the US, there is more space to manage this influx of population than in some other countries.

Immigration also means that the growth of the retired population who will require social security payments while not providing any new tax revenues into the economy, can be sustained as there is a continual supply of new taxpayers. In Japan, where land is a limited resource, this has become a huge problem, where an aging population causes issue of an unstable economy. Unemployment since the global economic downturn remains relatively high, the official figure being 9%, but dependent upon which measure being used may be as high as 15%. As the downturn has forced wages down, it is increasingly the case that new jobs are going to the immigrant population who are happier being paid less. This means that unemployment among the native US population is higher than average and is set to stay this way for some time to come.

The withdrawal of easy credit as a result of the recession has also meant that there are a large number of people whose homes have been repossessed or who are in arrears with their mortgage payments. In turn this has meant a drop in consumer spending with a subsequent knock on impact to revenues of small and large businesses. These businesses account of over 90% of the economy of the US, so the impact is clear.

However, in areas of technology and science, the United States is seeing massive growth as companies supplying social networking, internet searches and computing or tablet technology have growing exponentially in the past decade. The way people interact particularly the generation born since 1990, 98% of whom have used, or regularly use a social networking site has altered radically in those years, and if world economies are changed in the same way, then there is a whole new phase of United States economic growth to come in the remainder of the twenty-first century.

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