What is Wrong with the American Economy - Research Paper Example

? What is Wrong With the American Economy? This essay considers a number of fundamental issues with the American economy. In these regards, it first argues that Federal spending and the increasing National Debt are major areas of concern. It then demonstrates that the high and rising unemployment rate is another fundamental concern within the economy. Finally, it considers the very nature of the American political and economic sectors as demonstrating significant structural elements that are contributing to the country’s economic problems. After the Great Depression, the United States experienced unprecedented economic growth and progress for close to the entirety of the 20th century. During the early years of the 21st century this growth continued in sometimes staggering proportions with house prices steadily rising and Americans enjoying sizeable economic success. In 2008 this stopped. With the sub-prime mortgage crisis leading the charge, the American and eventually the world economy experienced perhaps the greatest economic collapse since the Great Depression. Even as some progress has been made in staving off the tide of recession, including lackluster reform policies, in great part the American economy is still experiencing a large number of problems. This essay functions by examining a variety of problems that are wrong with the American economy and indicating why they are important issues to consider. While politicians and the varying perspectives of the public differ on exactly what is wrong with the American economy, it’s clear there are a number of foundational issues that are notable. One of the most notable issues is that while the country has experienced significant economic recession, the United States government has continued to spend at alarming rates. Statistics demonstrate that today Federal spending is more than eighteen times higher than it was in 1970. This is not a political party issue, as both Republican and Democrat administrations have demonstrated alarming spending rates. Even more notable is that projections demonstrate that such spending is not believed to be curtailed in upcoming years, but rather will increasingly rise, with an estimated 5.6 trillion dollars to be spent in 2010 (‘What is Wrong’). While in a robust economy, such spending cycles may be necessary or make fiscal sense they are an important problem to consider, as the United States has increasingly become more in-debt. In fact, another major problem with the American is economy is the growing National Debt rate. For instance, the United States’ National Debt is now fourteen times larger than it was as early as 1980. Basic common sense demonstrates that a country that continues to spend money that it does not have is standing on an unstable foundation. In addition, the rising interest rate on this debt could ultimately prove to be crippling to the American economic structure. It’s critical that the United States resolve these spending and debt issues to ensure more economic weaknesses are allayed. Another major problem with the American economy is the increasing unemployment rate. For the greater part of the 20th century America experienced tremendous economic success and employment, but with increasing Asian competition, and outsourcing of jobs, there has been a corresponding rise in unemployment. In these regards, unemployment has been steadily increasing in America since the 1970s (‘What is Wrong’). This is a complicated issue, as corporations have slowly outsourced jobs overseas for minimal wage rates. The question becomes at what extent should they be allowed to continue paying what has been deemed ‘slave labor rates’. While these are the realities of the globalized world, they have been coupled in recent years with the collapsing American economy, which has in-turn resulted in staggering unemployment rates. The unemployment rate is perhaps the hot-bottom issue within the American economy with researchers noting that currently the average duration an individual stays on unemployment – over twenty-weeks – is the highest it has been since World War II (Tanous, 2011). While robust stimulus packages have been argued to stem the tide of unemployment, they have also contributed to the growing debt and not been effective enough in restoring the American economy to its pre-recession levels. Ultimately, it’s clear that unemployment is one of the major problems in the American economy. In addition to these specific concerns, a growing number of researchers have argued that the very nature of the American political and economic sectors demonstrating significant structural elements that are contributing to the country’s economic problems. Charles Ferguson’s (2010) recent film Inside Job, which won the Academy Award for Best Documentary, argues that the American financial sector has become so strong that they have actually began to influence and shape the very political institutions that are supposed to be instituting economic reform. In these regards, it points to key academics and business professors receiving substantial sums of money from major financial institutions for consulting, lecturing, and writing. Tanuson (2011) also notes that the strong lobbying power these institutions are able to wield is one of the major challenges that are standing in the way of reform measures being placed on the financial institutions that contributed to the economic collapse through their unethical policies. Ultimately, it’s clear that in addition to internal economic concerns, America must address a number of pressing structural concerns that have damaged the country’s financial system. In conclusion, this essay has considered a number of major problems with the American economy. The first problem is Federal spending and the increasing National Debt. This is an important concern as the rising interests rates could ultimately cripple the country. The second problem is high and rising unemployment rates. This is a fundamental aspect of American existence, and perhaps the key problem facing American politicians. The third problem is the very nature of the American political and economic sectors as demonstrating significant structural elements that contribute to the country’s economic woes. This is the most complex, yet perhaps the most important concern, as without meaningful financial and political reform the country will continue to experience economic turmoil. Ultimately, it’s imperative that these issues be addressed to ensure America regains it position of financial security and economic prominence. References Ferguson, Charles. (2010) Inside Job. Columbia Pictures. Tanous, Peter. (2011). Debt, Deficits, and the Demise of the American Economy. New York: Wiley Press. ‘What is Wrong With the U.S. Economy?’ The Economic Collapse. http://theeconomiccollapseblog.com/archives/what-is-wrong-with-the-u-s- economy-here-are-10-economic-charts-that-will-blow-your-mind Read More