Economic Problems in the United States

Question

I’m an international student, and I want to write about the economic problems in the US.

Answer

Nandes Wheaton

Professor Juan

Economics Paper

11 November 2014.

Economic Problems in the United States

The US economy is facing numerous economic problems. They have created a situation where the country is struggling to maintain its position as the world’s superpower. The main ones include more imports than exports, predatory practices in foreign trade, trade deficits that have run out of control, and ineffective management of access to the country’s markets. The aim of this paper is to discuss these economic problems.

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Few countries have experienced what the US is experiencing today in the form of economic disaster (Angelides and Thomas 84). The economy is in a deep crisis. For instance, the world’s most powerful nation imports more than it exports. It is also selling its valued assets in order to pay off debts. The massive debts indicate that the country is living beyond its means. Dependence on imports threatens to strip the country of its status as a superpower. This is because it is likely to erode the leverage the country has continued to enjoy in the realm of national security and domestic self-sufficiency. Indeed, many of the foreign policy problems the US faces today arise from the country’s economic problems at home.

Predatory trade practices in foreign trade are hugely to blame for some of the economic problems facing the US today (Reinhart and Rogoff 29). For example, offshoring to China has already led to the loss of millions of jobs in the US. Despite this loss, the US continues to encourage companies to outsource most of their production activities to third world countries in Asia and Africa.

Trade deficits also pose a major problem for the US economy. The cost of doing business has risen dramatically as the federal government taxes firms heavily in order to cover these debts. Because of this, many American manufacturers are unable to compete with their counterparts in the third world in terms of reducing the cost of production. This situation has reduced the overall competitiveness of American products in the global market. In the long run, this lack of competitiveness is likely to plunge the country in deeper economic problems in the future. It should be noted that according to the American experience, trade deficit often goes hand in hand with job losses. Thus, an ideal way of creating employment is by addressing the pressing economic challenges of trade deficits.

            Access to markets is also a major economic challenge for the US. The country expects other countries to maintain acceptable standards in the areas of competition and labor market, which they never do. Consequently, the US is left in a position where it has to struggle to maintain its hold on its traditional markets. These markets are increasingly being taken over by competing countries that have a higher cost advantage. To address this problem, the US needs to come up with strategies that facilitate competition based on national needs rather than efforts to standards in the international market.

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            In conclusion, the US needs to take a new direction in order to address the serious economic problems that it faces today. It should seek to entrench policies that lead to more exports than imports. One way to solve the problem is by stemming from predatory practices in the foreign market. Offshoring and outsourcing may work to the disadvantage of the US economy in the long run by causing trade deficits to spiral out of control. By address the problem of trade deficits, more jobs are likely to be created within the country’s economy.

Works Cited

Angelides, Phil, and Thomas, Bill. The Financial Crisis Inquiry Report: Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States. Pearson Books: New York, 2011. Print.

Reinhart, Carmen, and Rogoff, Kenneth. Is the 2007 US sub-prime financial crisis so different? An international historical comparison. Prentice-Hall: Boston, 2008. Print.