Major Economic Problems Facing the United States - Research Paper Example

Major economic problems facing the United s The economical crisis in the United s is unforeseen, covered under the emblem of superpower. The situation on the ground reveals the opposite, Cotton (1958). The United States is facing an ‘economical struggle’ of the magnitude few countries in the world are facing at the moment. Precisely, the United States is failing to acknowledge the predatory foreign trade practices that are perceived as threat in the U.S. industry. This has greatly helped United States to be in the fore front to design, manufacture, and produce in the third world countries for instance china and Mexico, while the problem home is uncontainable. The U.S. no longer manufacture enough to feed it is locals. The economic situation is unsustainable. The United States imports more than it is able to export. The U.S. is disposing off it is assets to sustain a moderate standard of living. In some constraining circumstances, the U.S. is taking massive debts to sustain the economy from falling (Baker & Baker, 2011). According to Cotton (1958), economical problems reflect the inadequacy of intellectual and material resources in the society. United States is world super power characterized by the control of the world in decision making of economic nature. Also notwithstanding, it is the most unequal industrialized nation, apart from the few Asians city states. Some of the economic problems now facing include the following (Cotton, 1958). There is the problem of trade deficits. Currently the U.S. imports more than it exports. For this reason the net cash outflow is negative. The U.S. has failed to produce enough to feed it is people; hence it is forced to import food from other countries. While this is happening, the regulatory and tax system have without a vivid reason raised domestic business costs. Apart from this, the fundamental cause to the present economic crisis in the U.S. was caused by the three decades detrimental U.S. trade and globalization policies (Baker & Baker, 2011). In addition, the economic problem in the U.S. is the inaccessibility to the markets. U.S. has naively and assumed that other countries will carry and hold themselves to the U.S. standards. The measured standards here include environment, labor and competition policy, Cotton (1958). These standards greatly affect the cost of production in the U.S. Economically, “if these countries fail to adhere to these standards, they gain an unfair cost advantage”. It is believed that U.S market has lost it is former glory, due the participation in the world trade. The U.S has subscribed to international bodies like the world trade organization (WTO). All countries affiliating to this organization must follow all the regulations of trade policies laid down. Whether they favor U.S or not in production and distribution, they must be observed. One major trade in the agreement with the WTO is the one way trade, for instance “NAFTA and CAFTA” (p.78). The U.S. with regard to this has failed to protect her wealth and recourses, which have indirectly impacted on the industries and workers (Cotton, 1958). The U.S on the other has failed to pursue the right trade policies, since U.S. relies only on promotion of open markets and pursuing economic markets abroad. This trade policy has proved unsuccessful, since it has neglected the local industries, Baker & Baker (2011). This negligence of the local industries in the U.S, have resulted in their down fall in production and finally their collapse. This has been worsening, as the local industries do not have the manpower to sustain the capacity for investment and production (Baker & Baker, 2011). Foreign countries are now using the funds earned through the trade deficits to buy many of the U.S. strategic companies. It is estimated that foreign investors have purchased a large amounts of assets in the U.S. These assets are approximated at more than 10 trillion dollars. The U.S. has allowed the international partners in trade to render it dependent of their production, financing and innovation. This is particularly heightened by the U.S losing at “domestic self sufficiency, national security and leverage in foreign affairs will suffer greatly” (Cotton, 1958). According to Beaglehole and Bonita (2004), access to health insurance and basic health care programs, is another economic the U.S is facing. The U.S. does not have a universal health care system. The health insurance provision is often for the employed while the unemployed, part-time employees and the majority of the self-employed have to dig deep into their pockets to pay for their own health insurance. Statistics reveals that by the year 2001, 14.9 % of the population had no health insurance coverage. This number was approximated to 42 million people. Three years down the line the number, had risen to 45 million, equivalent to 15.6%. “According to the U.S. Census Bureau attributed the drop primarily to the loss of employer-provided plans due to the economic downturn and a continuation of the rising costs” (Brenda, 2000). According to the recent study conducted by the Harvard University, reveals that the constant increase of the medical bills are the cause of bankruptcy in the U.S. This study continue to show that, those who were declared bankruptcy were from the middle class and they are thought to have been employed before they fall sick, unfortunately lost their health before they were declared bankruptcy. Efforts to provide sustainable health care programs were critically opposed by the politicians, especially in the “year between 1960 and 1990. The politicians objected the government control of medicine”, Beaglehole and Bonita (2004). This was particularly worsened by the fact that the business groups were opposed to the regulation of insurance and health-care industries (Beaglehole and Bonita, 2004).  Baker & Baker (2011), points out that, the federal government has proved unable to keep the spending under control. This has greatly affected the U.S. in trade particularly the debt burden management. This is especially surprising in that much of this debt is being funded by “the investors outside the U.S”. This one has worsened by the plan to restore the international market through, deficit spending. This is a “tax shift from current generation, to the future generation” (p. 89). This transfer will only mount on the problem as opposed to short run help it can offer. This is where the U.S. federal government has failed to act upon and hence, the deterioration of the markets. The financing of the deficit amount could rather have been used in the ongoing operational expenses rather than to finance public works projects. Lastly, “the U.S. has signed up treaties with predatory foreign countries and companies that have sought to weaken and destroy the U.S. economy and industries”. The tariffs signed also limit U.S. government from pursuing further trade expansionary policies. The policy on fair and free completion has left the U.S on the losing end. This is because the U.S. has not controlled the trade policies of other countries on their land (Baker & Baker, 2011). References Baker, J.J., & Baker, R.W. (2011). International Finance: U.S. Economy (3rd ed.) Sudbury, MA: Jones and Bartlett Beaglehole, R., and Bonita, R. (2004). International Economics. Cambridge, Cambridge University Press Brenda, M. (2000). Trade Policies and Regulations: International Markets. Auckland, New Zealand: Viking. Cotton, H. (1958). Foreign Exchange Markets: Global Economy. 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