The Economy of the United States

The United States has one of the most technologically advanced and the largest economies in the world. With a gross domestic product of 12.37 trillion dollars, the United States is a thriving and contemporary national economy.

In the capitalistic, free-market, mixed economy of the United States, private firms nad corporations make the vast majority of microeconomic decisions. In this economic system, governments prefer to take a more minimal role in the domestic economy. For this reason, the United States has a very tiny social safety net.

A social safety net is a collection of services offered by the state which prevent any individual from falling below the poverty line. Canada, for example, has a much larger social safety net built into their national economy. They have a public healthcare system and continue to develop and expand various types of welfare programs, whereas the United States has been busily cutting more and more welfare programs and tax breaks for the middle and lower classes.

Though many people credit the sturdy social safety net of Canada for the lower crime rates, others feel that the lower crime rates and poverty are due to different culture and stricter gun laws rather than these social and economical facets of society.

Business firms in the United States have considerably less regulations than business in many other nations. Since the New Deal, the United States has followed the general ideals and concepts of Keynesian economics. Keynesian economics replaced what is referred to as classical economics.

Classical economics refers to a reorienting of economics away from focus on personal rulers’ economic interests, but to a class-based interest in the economy. The theory of what determined natural prices comes from the classical school of economics.

In a Keynesian perspective of the economy, there is no automatic or strong tendency for output and employment to move toward a state of full employment levels. Basically, Keynesian economics believes in General equilibrium that allows prices to adjust to achieve this equilibrium. How this differs from classical economics is that in a classical economy utilization of resources must be high; whereas in Keynesian economics the utilization of resources does not matter.

The United States economy has also been influenced by the neoliberal economic ideals of the Ronald Regan presidency. Neoliberal economics deals more with globalization as well as the micro-level side of the economy.

Since the 19080s the United States has changed from being the world’s largest creditor to having a sizeable current account deficit, not to mention a national debt of unheard of size relative to the national gross product since World War II.

In every economy managers and entrepreneurs bring together labor, natural resources, and technology to produce3 and distribute services and goods. The way these economy elements are organized and used reflects a country’s political and social ideals as well.

Although Americans often disagree about where to draw a line separating their beliefs in both government management and free enterprise, the mixed economy that has been developed has been remarkably successful until recent years. Many believe this to be due, quite solely, to corporate biased government and these officials funneling federal funds into their own pockets though corporate facades and networks.

Another current and growing criticism of the US economy is the vast amount of federal resources that are put toward tools and waging of war. The United States spends the majority of its annual resources on maintaining military bases around the world, as well as on all the weapons and supplies needed in other parts and occupations around the world.

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