Limits to the U.S. long-term economic growth ( - Essay Example

Limits to the U.S. Long-term Economic Growth Limits to the U.S. Long-term Economic Growth Economic growth is defined as the long term potential of a country’s productivity. The long term economic growth of a specific country is measured using the trends in the GDP and further illustrated in the country’s Long Run Aggregate Supply Curve (LRSC). There are various demand and supply issues that limit the economic growth in the United States. Poor infrastructure hinders growth because of its relative effects in high costs, business delays and the reduction of the mobility labor.

In addition, external shock vulnerability has affected the economic growth in the U.S in that, the modern global economy is depended upon other countries and therefore a financial crisis in one country is reflected in all other countries. Notably, poor governance and corruption has been described by researchers as the greatest vice inhibiting the economic growth in the U.S. Moreover, the decline in population resulting from aging or migration has negatively affected the economic growth. Economic sustainability requires improvements in productivity and innovations therefore, inadequate investment in human capital is a factor limiting the economic growth in the U.S. Studies have also depicted that, US has too many resources that are never exploited fully and therefore they fail to develop as expected (Jorgenson, Fraumeni, & Gollop 2004).

The US government should step in with effective strategies that are going to counter the constraints of her economic growth. The future growth in U.S is facing a threat from infrastructure weaknesses within some of its cities, for example, Los Angeles. The government will need to abruptly spend more on infrastructure so as to deal with the consequences of declining economy. In addition, the US government needs to invest in insurance companies so that external shocks will never affect the economy of the country (Jorgenson, Fraumeni, & Gollop 2004).

An effective legal framework will be able to curb the corruption and poor governance vice. Therefore, private property protection via legal frameworks will facilitate innovation and development within US. High level skills are required for economic growth. The government should provide incentives and employment opportunities to its professional citizens otherwise, they will migrate to other countries for such priorities (Vatter & Walker 2006). It is an absolute good idea that the US government’s efforts are required in the promotion of economic growth.

This is because of the diverse areas in which the government should play some very critical roles. Training and provision of credit to young businesses is an area that the government can invest in for a long term economic growth. The government should provide its citizens with equity loans to fund their businesses. In addition to the provision of loan to the young businesses, the government could still help them export their products by embracing innovation. Therefore, it is notable that a well structure government program could help propel the economic growth of the country (Vatter & Walker 2006).

ReferencesJorgenson, D. W., Fraumeni, B. M., & Gollop, F. M. (2004). Productivity and U.S. economic growth. San Jose [u.a.: toExcel.Vatter, H. G., & Walker, J. F. (2006). History of the U.S. economy since World War II. Armonk, N.Y: M.E. Sharpe.