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      USA USA Document Transcript

    • Introduction The economic history of the United States has its roots in European colonization in the 16th, 17th, and 18th centuries. Marginal colonial economies grew into 13 small, independent farming economies, which joined together in 1776 to form the United States of America. In 230 years the United States grew to a huge, integrated, industrialized economy that makes up nearly a quarter of the world economy. Major factors in this growth included a large unified market, a supportive political-legal system, vast areas of highly productive farmlands, vast natural resources (especially timber, coal, iron, and oil), and an entrepreneurial spirit and commitment to investing in material and human capital. The economy has maintained high wages, attracting immigrants by the millions from all over the world. Technological and industrial factors played a major role. History The economic history of the United States has its roots in European settlements in the 16th, 17th, and 18th centuries. The American colonies went from marginally successful colonial economies to a small, independent farming economy, which in 1776 became the United States of America. In 180 years the US grew to a huge, integrated, industrialized economy that still makes up around one fifth of the world economy. As a result, the US GDP per capita converged on and eventually surpassed that of the U.K., as well as other nations that it previously trailed economically. The economy has maintained high wages, attracting immigrants by the millions from all over the world The American Revolution (1775–1783) brought a dedication to unalienable rights to "life, liberty, and the pursuit of happiness" which emphasize economic entrepreneurship, and simultaneously a commitment to the political values of republicanism. Britain's war against the AmericansCongress and the American states had no end of difficulty financing the war. In 1775 there was at most 12 million dollars in gold in the colonies. When Robert Morris was named Superintendent of Finance of the United States, did the national government have a strong leader in financial matters? Morris used a French loan in 1782 to set up the private Bank of North America to finance the war. Congress used four main methods to cover the cost of the war, Congress made two issues of paper money, in 1775–1780, and in 1780–81. The first issue of paper money would supposedly be redeemed for state taxes, but the holders were eventually paid off in 1791 at the rate of one cent on the dollar. By 1780, the paper money was "not worth a Continental", as people said, and second issue of new currency was attempted in 1780’s.but it failed
    • Expansion and growth Industrial revolutions The interpretation of past economic growth is anchored by the three industrial revolutions. The first revolution:- The first revolution centered in 1750-1830 from the inventions of the steam engine and cotton gin through the early railroads and steamships, but much of the impact of railroads on the American economy came later between 1850 and 1900. At a minimum it took 150 years for to have its full range of effects. Cotton industry ―The First Cotton Gin‖ conjectural in 1869 Cotton, at first a small-scale crop in the South, boomed following Eli Whitney's invention in 1793 of the cotton gin, a machine that separated raw cotton from seeds and other waste. Soon, large plantations, based on slave labor, expanded in the richest lands from the Carolinas westward to Texas. The raw cotton was shipped to textile mills in Britain, France and New England. Railroads Railroads made a decisive impact on the U.S. economy especially in the 1850–1873 eras, making possible the transition to an urban industrial nation with high finance and advanced managerial skills.1850 The United States had 10,000 miles of track.1890 The United States had 164,000 miles of track Urbanization By 1860, on the eve of Civil War, 16% of the people lived in cities with 2500 or more people and one third of the nation's income came from manufacturing. Urbanized industry was limited primarily to the Northeast; cotton cloth production was the leading industry, with the manufacture of shoes, woolen clothing, and machinery also expanding.
    • The second revolution:- The second industrial revolution within the years 1870-1900 created within just a few years the inventions that made the biggest difference to date in the standard of living. Electric light and a workable internal combustion engine were invented in a three-month period in late 1879. The number of municipal waterworks providing fresh running water to urban homes multiplied tenfold between 1870 and 1900. The telephone, phonograph, and motion pictures were all invented in the 1880s. The benefits of included subsidiary and complementary inventions, from elevators, electric machinery and consumer appliances; to the motorcar, truck, and airplane; to highways, suburbs, and supermarkets; to sewers to carry the wastewater away All this had been accomplished by 1929, at least in urban America, although it took longer to bring the modern household conveniences to small towns and farms. Additional ―follow-up‖ inventions continued and had their main effects by 1970, including 4 Television, air conditioning, and the interstate highway system. The inventions of were so important and far-reaching that they took a full 100 years to have their main effect. The third revolution:- The third revolution is often associated with the invention of the web and Internet around 1995. But in fact electronic mainframe computers began to replace routine and repetitive clerical work as early as 1960. The treatment below of includes examples of the many electronic laborsaving inventions and convenience services that already were widely available before 1995. Economic Growth in the 19th century The Great Depression:- The Great Depression struck countries in the late 1920s and continued throughout the entire 1930's. It affected the US were detrimental. In 1933, 25 percent of all workers were unemployed in America.Many families starved or lost their homes. Some tried traveling to the West to find work, also to no avail. Because of the prolonged recovery of the United States economy and the major changes that the Great Depression forced the government tomake, the creation of fiscal policy is often referred to as one of the defining moments in the history of the United States. Decade Beginning Real GDP (in millions of 2011 dollars) Population (in thousands) Real GDP per capita (in 2011 dollars) Decade Percentage Change Average Annual Percentage (last decade) 1791 $4,847 4,048 $1,197.44 NA NA 1801 $8,781 5,461 $1,607.92 34.3% 3.0% 1811 $12,593 7,436 $1,693.56 5.3% 0.5% 1821 $17,226 9,899 $1,740.15 2.8% 0.3% 1831 $27,212 13,277 $2,049.56 17.8% 1.7% 1841 $36,429 17,612 $2,068.43 0.9% 0.1% 1851 $60,673 24,095 $2,518.07 21.7% 2.0% 1861 $94,773 32,215 $2,941.89 16.8% 1.6% 1871 $133,407 41,010 $3,253.04 10.6% 1.1% 1881 $244,512 51,466 $4,750.93 46.0% 3.9% 1891 $366,133 64,432 $5,682.48 19.6% 1.9% 1901 $504,794 77,584 $6,506.41 14.5% 1.5%
    • The Great Depression showed the American population that there was a growing need for the government to manage economic affairs. The size of the federal government began rapidly expanding in the 1930s, growing from 553,000 paid civilian employees in the late 1920s to 953,891 employees in 1939. The budget grew substantially as well. In 1939, federal receipts of the administrative budget were 5.50 percent of Gross National Product, GNP, while federal expenditures were 9.77 percent of GNP These numbers were up significantly from 1930, when federal receipts averaged 3.80 percent of GNP while expenditures averaged 3.04 percent of GNP. Spending:- Government spending increased from 8.0% of GNP under Hoover in 1932 to 10.2% of GNP in 1936. While Roosevelt balanced the "regular" budget the emergency budget was funded by debt, which increased from 33.6% of GNP in 1932 to 40.9% in 1936. Deficit spending had been recommended by some economists, most notably John Maynard Keynes in Britain. Roosevelt met Keynes but did not pay attention to his recommendations. After a meeting with Keynes, who kept drawing diagrams, Roosevelt remarked that "He must be a mathematician rather than a political economist." Banking crisis:- In 1929–33 the economy was destabilized by bank failures. The initial reasons were substantial losses in investment banking, followed by bank runs. Bank runs occurred when a large number of customers lost confidence in their deposits and rushed to withdraw their deposits. Runs destabilized many banks to the point where they faced bankruptcy. Between 1929 and 1933 40% of all banks went bankrupt.Much of the Great Depression's economic damage was caused directly by bank runs. Roosevelt acted as soon as he took office; he closed all the banks in the country and kept them all closed until he could pass new legislation. On March 9, Roosevelt sent to Congress the Emergency Banking Act, drafted in large part by Hoover's top advisors. The act was passed and signed into law the same day. It provided for a system of reopening sound banks under Treasury supervision, with federal loans available if needed. Three-quarters of the banks in the Federal Reserve System reopened within the next three days. Billions of dollars in hoarded currency and gold flowed back into them within a month, thus stabilizing the banking system. By the end of 1933, 4,004 small local banks were permanently closed and merged into larger banks. Their deposits totaled $3.6 billion; depositors lost a total of $540 million, and eventually received on average 85 cents on the dollar of their deposits; it is a common myth that they received nothing back.) The Glass– Steagall Act limited commercial bank securities activities and affiliations between commercial banks and securities firms to regulate speculations. It also established the Federal Deposit Insurance Corporation (FDIC), which insured deposits for up to $250,000, ended the risk of runs on banks.
    • Effects of depression in the U.S.A 13 million people became unemployed. In 1932, 34 million people belonged to families with no regular full-time wage earner. Industrial production fell by nearly 45% between 1929 and 1932. Homebuilding dropped by 80% between the years 1929 and 1932. In the 1920s, the banking system in the U.S. was about $50 billion, which was about 50% of GDP. From 1929 to 1932, about 5,000 banks went out of business. By 1933, 11,000 of the US' 25,000 banks had failed. Between 1929 and 1933, U.S. GDP fell around 30%, the stock market lost almost 90% of its value. In 1929, the unemployment rate averaged 3%. In 1933, 25% of all workers and 37% of all nonfarm workers were unemployed. One Soviet trading corporation in New York averaged 350 applications a day from Americans seeking jobs in the Soviet Union. Over one million families lost their farms between 1930 and 1934. Corporate profits had dropped from $10 billion in 1929 to $1 billion in 1932. Between 1929 and 1932, the income of the average American family was reduced by 40%. Nine million savings accounts had been wiped out between 1930 and 1933. World War I and effects The World War involved a massive mobilization of money, taxes, and banking resources to pay for the American war effort and, through government-to-government loans, most of the Allied war effort as well. Under Republican President Warren G. Harding, who called for normalcy and an end to high wartime taxes, Secretary of the Treasury Andrew Mellon raised the tariff, cut other taxes, and used the large surplus to reduce the federal debt by about a third from 1920 to 1930. Secretary of Commerce Herbert Hoover worked to introduce efficiency, by regulating business practices. This period of prosperity, along with the culture of the time, was known as the Roaring Twenties. The rapid growth of the automobile industry stimulated industries such as oil, glass, and road-building. Tourism soared and consumers with cars had a much wider radius for their shopping. Small cities prospered, and large cities had their best decade ever, with a boom in construction of offices, factories and homes.
    • The new electric power industry transformed both business and everyday life. Telephones and electricity spread to the countryside, but farmers never recovered from the wartime bubble in land prices. Millions migrated to nearby cities. However, in October 1929, the Stock market crashed and banks began to fail in the Wall Street Crash of 1929. World War II and effects World War II forced the government to run huge deficits, or spend more than they were economically generating, in order to keep up with all of the production the US military needed. By running deficits, the economy recovered, and America rebounded from its drought of unemployment. The military strategy of full employment had a huge benefit: the government’s massive deficits were used to pay for the war, and ended the Great Depression. This phenomenon set the standard and showed just how necessary it was for the government play an active role in fiscal policy. The Employment Act of 1946 was enacted by the government to keep the economy from plunging back into a post-war depression. The act declared the continuing policy and responsibility of the federal government to use all reasonable means to promote maximum employment, production, and purchasing power. In addition to focusing on keeping unemployment rates low, the act called for the creation of the Council of Economic Advisors. This council had the task of assisting the president in appointing members to the Joint Economic Committee in the United States Congressand continuing to develop the role of fiscal policy in the United States. Modern fiscal policy:- The United States government has tended to spend more money than it takes in, indicated by a national debt that was close to $1 billion at the beginning of the 20th century. The budget for most of the 20th century followed a pattern of deficits during wartime and economic crises, and surpluses during periods of peacetime economic expansion. In 1971, at Bretton Woods, the US went off the gold standard allowing the dollar to float. Shortly after that, the price of oil was pegged to gold rather than the dollar by OPEC. The 70s were marked by oil shocks, recessions and inflation in the US. From fiscal years 1970 to 1997; although the country was nominally at peace during most of this time, the federal budget deficit accelerated, topping out at $290 billion for 1992. In contrast, from FY 1997–2001, gross revenues exceeded expenditures and a surplus resulted. However, it has been argued that this 'balanced budget' only constituted a surplus in the public debt in which the Treasury Department borrowed increased tax revenue from intragovernmental debt holdings thus adding more interest on Treasury bonds. The budget went from a $236 billion surplus in fiscal year 2000 to a $413 billion deficit in fiscal year 2004. In fiscal year 2005, the deficit began to shrink due to a sharp increase in tax revenue. By 2007, the deficit was reduced to $161 billion.Less than half of what it was in 2004 and the budget appeared well on its way to balance once again. In late 2007 to early 2008, the economy would enter a particularly bad recession as a result of high oil and food prices, and a substantial credit crisis leading to the bankruptcy and eventual federal takeover of certain large and well established mortgage providers. In an attempt to fix these economic problems, the United States federal government passed a series of costly economic stimulus and bailout packages.
    • As a result of this, in fiscal year 2008, the deficit would increase to $455 billion and is projected to continue to increase dramatically for years to come due in part to both the severity of the current recession and the high spending fiscal policy the federal government has adopted to help combat the nation's economic woes. The Congressional Budget Office projects that the federal budget deficit for fiscal year 2009 will spike dramatically to an unprecedented $1.2 trillion, or 8.3% of the gross domestic product (GDP). The new budget plan is set to leave the US with a record-breaking deficit of $1.56trn in 2010 As a percentage of the GDP, within the context of the national economy as a whole, the highest deficit was run during fiscal year 1943 at over 30% of GDP, whereas deficits during the 1980s reached 5–6% of GDP and the deficit for 2005 was 2.6% of GDP, close to the post- World War II average. In 2009, the deficit grew closer to 14% of GDP, which was caused by government actions. THE ECONOMIC FREEDOMS IN UNITED STATES RULE OF LAW Although property rights are guaranteed and the judiciary functions independently and predictably, the government’s treatment of the property rights of certain bondholders during the 2009 bailout of the automotive industry raised long-term questions about the rule of law. Corruption is a concern as the cronyism and economic rent-seeking associated with the growth of Governments have undermined institutional integrity. LIMITED GOVERNMENT In the absence of comprehensive tax reforms, the top individual and corporate tax rates remained at 35 percent as of mid-2012. Other taxes include a capital gains tax and excise taxes. The overall tax burden equals 24.8 percent of total domestic income. Total government spending continues to be around 42 percent of GDP. Budget deficits have exceeded $1 trillion in each year since 2009. REGULATORY EFFICIENCY Business start-up procedures, regulated primarily at the state level, are efficient, and the labor market remains largely flexible. However, over 100 new major federal regulations have been imposed on business operations since early 2009 with annual costs of more than $46 billion. Although core inflation remains muted, the failure to adhere to a rules-based monetary policy has introduced price distortions and long-term inflation risks. OPEN MARKETS The trade-weighted average tariff rate is 1.8 percent, and additional barriers such as anti- dumping laws and ―Buy American‖ rules add to the cost of trade. Investment freedom is hampered by some sectorial limits. Although detailed regulations have been emerging only gradually, the financial reforms adopted in 2010 are likely to increase costs and uncertainty, complicating the banking sector’s recovery.
    • World's largest economy The United States has been the world's largest national economy since at least the 1920s. For many years following the Great Depression of the 1930s, when danger of recession appeared most serious, the government strengthened the economy by spending heavily itself or cutting taxes so that consumers would spend more, and by fostering rapid growth in the money supply, which also encouraged more spending. Ideas about the best tools for stabilizing the economy changed substantially between the 1930s and the 1980s. From the New Deal era that began in 1933, to the Great Society initiatives of the 1960s, national policy makers relied principally on fiscal policy to influence the economy. The approach, advanced by John Maynard Keynes, gave elected officials a leading role in directing the economy, since spending and taxes are controlled by the U.S. President and the Congress. The "Baby Boom" saw a dramatic increase in fertility in the period 1942–1957; it was caused by delayed marriages and childbearing during depression years, a surge in prosperity, a demand for suburban single-family homes and new optimism about the future. The boom crested about 1957, and then slowly declined. A period of high inflation, interest rates and unemployment after 1973 weakened confidence in fiscal policy as a tool for regulating the overall pace of economic activity. The US economy grew by an average of 3.8% from 1946 to 1973, while real median household income surged 74%.The economy since 1973, however, has been characterized by both slower growth, and nearly stagnant living standards, with household incomes increasing by 10%, or only 0.3% annually. The worst recession in recent decades, in terms of lost output, occurred during the financial crisis of 2007–08, when GDP fell by 5.0% from the spring of 2008 to the spring of 2009. Other significant recessions took place in 1957–58, when GDP fell 3.7%, following the 1973 oil crisis, with a 3.1% fall from late 1973 to early 1975, and in the 1981–82 recessions. WhenGDP dropped by 2.9% Recent, mild recessions have included the 1990–91 downturn, when output fell by 1.3%, and the 2001 recession, in which GDP slid by 0.3%; the 2001 downturn lasted just eight months. The most vigorous, sustained periods of growth, on the other hand, took place from early 1961 to mid-1969, with an expansion of 53%, from mid- 1991 to late in 2000, at 43%, and from late 1982 to mid-1990, at 37% . Slower growth since the early 1970s Since the 1970s, several emerging countries have begun to close the economic gap with the United States. In most cases, this has been due to moving the manufacture of goods formerly made in the U.S. to countries where they could be made for sufficiently less money to cover the cost of shipping plus a higher profit. In other cases, some countries have gradually learned to produce the same products and services that previously only the U.S. and a few other countries could produce. Real income growth in the U.S. has slowed. The North American Free Trade Agreement, or NAFTA, created the largest trade bloc in the world in 1994.
    • Since 1976, the US has sustained merchandise trade deficits with other nations, and since 1982, current account deficits. The nation's long-standing surplus in its trade in services was maintained, however, and reached a record US$195 billion in 2012. In recent years, the primary economic concerns have centered on: high household debt, high net national debt, high corporate debt, high mortgage debt, high external debt, high trade deficits, a serious deterioration in the United States net international investment position (NIIP) and high unemployment. In 2006, the U.S. economy had its lowest saving rate since 1933. These issues have raised concerns among economists and national politicians. The United States economy experienced a crisis in 2008 led by a derivatives market and subprime mortgage crisis, and a declining dollar value. On December 1, 2008, the NBER declared that the United States entered a recession in December 2007, citing employment and production figures as well as the third quarter decline in GDP. The recession did, however, lead to a reduction in record trade deficits, which fell from $840 billion annually during the 2006–08 periods, to $500 billion in 2009, as well as to higher personal savings rates, which jumped from a historic low of 1% in early 2008, to nearly 5% in late 2009. The merchandise trade deficit rose to $670 billion in 2010; savings rates, however, remained at around 5%. Financial position:- In the late 1940s through the early 1970s, the US reduced their debt burden by about 30% to 40% of GDP per decade by taking advantage of negative real interest rates, but there is no guarantee that government debt rates will continue to stay so low. In January, 2012, the U.S. Treasury Borrowing Advisory Committee of the Securities Industry and Financial Markets Association unanimously recommended that government debt be allowed to auction even lower, at negative absolute interest rates. The overall financial position of the United States as of 2009 includes $50.7 trillion of debt owed by US households, businesses, and governments, representing more than 3.5 times the annual gross domestic product of the United States. As of the first quarter of 2010, domestic financial assets totaled $131 trillion and domestic financial liabilities $106 trillion. Tangible assets in 2008 for selected sectors totaled an additional $56.3 trillion. Since 2010, the U.S. Treasury has been obtaining negative real interest rates on government debt. Such low rates, outpaced by the inflation rate, occur when the market believes that there are no alternatives with sufficiently low risk, or when popular institutional investments such as insurance companies, pensions, or bond, money market, and balanced mutual funds are required or choose to invest sufficiently large sums in Treasury securities to hedge against risk.Lawrence summers. Measured by value of its listed companies' securities, the New York Stock Exchange is more than three times larger than any other stock exchange in the world. As of October 2008, the combined capitalization of all domestic NYSE listed companies was US$10.1 trillion. NASDAQ is another American stock and the world's 3rd largest exchange However NASDAQ's trade value is larger than Japan's TSE. NASDAQ is the largest electronic screen-based equity securities trading market in the U.S. With approximately 3,800 companies and corporations, it has more trading volume per hour than any other stock exchange
    • The U.S. finance industry comprised only 10% of total non-farm business profits in 1947, but it grew to 50% by 2010. Over the same period, finance industry income as a proportion of GDP rose from 2.5% to 7.5%, and the finance industry's proportion of all corporate income rose from 10% to 20%. The mean earnings per employee hour in finance relative to all other sectors has closely mirrored the share of total U.S. income earned by the top 1% income earners since 1930. The growth in total US GDP vs. median US household income, 1989–2011 Business culture A central feature of the U.S. economy is the economic freedom afforded to the private sector by allowing the private sector to make the majority of economic decisions in determining the direction and scale of what the U.S. economy produces. This is enhanced by relatively low levels of regulation and government involvementas well as a court system that generally protects property rights and enforces contracts. Today, the United States is home to 29.6 million small businesses, 30% of the world's millionaires, 40% of the world's billionaires, as well as 139 of the world's 500 largest companies. The United States is rich in mineral resources and fertile farm soil, and it is fortunate to have a moderate climate. It also has extensive coastlines on both the Atlantic and Pacific Oceans, as well as on the Gulf of Mexico. Rivers flow from far within the continent and the Great Lakes—five large, inland lakes along the U.S. border with Canada—provide additional shipping access. These extensive waterways have helped shape the country's economic growth over the years and helped bind America's 50 individual states together in a single economic unit. The number of workers and, more importantly, their productivity help determine the health of the U.S. economy. Consumer spending in the US rose to about 62% of GDP in 1960, where it stayed until about 1981, and has since risen to 71% in 2013. Throughout its history, the United States has experienced steady growth in the labor force, a phenomenon that is both cause and effect of almost constant economic expansion. Until shortly after World War I, most workers were immigrants from Europe, their immediate descendants, or African Americans who were mostly slaves taken from Africa, or their descendants
    • Industries by GDP value added 2011 Industry GDP value added $ billions 2011 % of total GDP Real estate, renting, leasing 1,898 13% State and Local Government 1,336 9% Finance and insurance 1,159 8% Health/social care 1,136 8% Durable manufacturing 910 6% Retail trade 905 6% Wholesale trade 845 6% Non-durable manufacturing 821 6% Federal Government 658 5% Information 646 4% Arts, entertainment 591 4% Construction 529 4% Waste services 448 3% Other services 447 3% Utilities 297 2% Mining 290 2% Corporate management 284 2% Education services 174 1% Agriculture 173 1% Total 15,075 100%
    • Employment There are approximately 154.4 million employed individuals in the US. Government is the largest employment sector with 22 million. Small businesses are the largest employer in the country representing 53% of US workers. The second largest share of employment belongs to large businesses that employ 38% of the US workforce. The private sector employs 91% of Americans. Government accounts for 8% of all US workers. Over 99% of all employing organizations in the US are small businesses. The 30 million small businesses in the U.S. account for 64% of newly created Jobs in small businesses accounted for 70% of those created in the last decade. The proportion of Americans employed by small business versus large business has remained relatively the same year by year as some small businesses become large businesses and just over half of small businesses survive more than 5 years. Amongst large businesses, several of the largest companies and employers in the world are American companies. Amongst them are Wal-Mart, the largest company and the largest private sector employer in the world, which employs 2.1 million people world-wide and 1.4 million in the US alone. There are nearly 30 million small businesses in the US. Minorities such as Hispanics, African Americans, Asian Americans, and Native Americans (35% of the country's population), own 4.1 million of the country's businesses Minority-owned businesses generate almost $700 billion in revenue and employ almost 5 million workers in the U.S. The median household income in the US as of 2008 is $52,029. About 284,000 working people in the US have two full-time jobs and 7.6 million have a part-time job in addition to their full-time employment. Of working individuals in the US, 12% belong to a labor union. The Percentage of the US population employed, 1995–2012.
    • Unemployment:- After being higher in the postwar period, the U.S. unemployment rate fell below the rising Eurozone unemployment rate in the mid-1980s and has remained significantly lower almost continuously since. In 1955, 55% of Americans worked in services, between 30% and 35% in industry, and between 10% and 15% in agriculture. By 1980, over 65% were employed in services, between 25% and 30% in industry, and less than 5% in agriculture. Male unemployment continued to be significantly higher than female unemployment (9.8% vs. 7.5% in 2009). The unemployment among Caucasians continues to be much lower than African-American unemployment (at 8.5% vs. 15.8% in 2009) As of February 2013, the unemployment rate in theUnited States was 7.7% or 12.0 million people,which includes the part-time underemployed was 14.3% or 22.2 million people. These figures were calculated with a civilian labor force of approximately 155 million people relative to a U.S. population of approximately 315 million people In 2009 through 2013, following the Great Recession, the emerging problem of jobless recoveries resulted in record levels of long-term unemployment with over 6 million workers looking for work longer than 6 months as of January, 2010. This particularly affected older workers. Since the recession's end in June 2009 in the United States, immigrants have gained 656,000 jobs, while U.S.-born workers lost more than a million jobs. In April 2010, the official unemployment rate was 9.9%, but the government’s broader U-6 unemployment rate was 17.1%. In the period between February 2008 and February 2010, the number of people working part-time for economic reasons has increased by 4 million to 8.8 million, an 83% increase in part-time workers during the two-year period. By 2013, although the unemployment rate had fallen below 8%, the record proportion of long term unemployed, continued decreasing household income, and new federal budget cuts remained indicative of a jobless recovery. Components of total US debt as a fraction of GDP 1945–2009
    • International trade The United States is the world's largest trading nation. There is a large amount of U.S. dollars in circulation all around the planet; about 60% of funds used in international trade are U.S. dollars. The dollar is also used as the standard unit of currency in international markets for commodities such as gold and petroleum. In 2010, U.S. exports amounted to $1.3 trillion and imports amounted to $1.9 trillion. Trade deficit was $634.9 billion. The deficit on petroleum products was $270 billion. The United States had a $168 billion surplus on trade in services, and $803 billion deficit on trade in goods in 2010. Currency and central bank The United States dollar is the unit of currency of the United States. The U.S. dollar is the currency most used in international transactions. The federal government attempts to use both monetary policy and fiscal policy) to maintain low inflation, high economic growth, and low unemployment. A privatecentral bank, known as the Federal Reserve, was formed in 1913 to supposedly provide a stable currency and monetary policy. The U.S. dollar has been regarded as one of the more stable currencies in the world and many nations back their own currency with U.S. dollar reserves. The U.S. dollar has maintained its position as the world's primary reserve currency, although it is gradually being challenged in that role.Almost two-thirds of currency reserves held Taxation:- Taxation in the United States is a complex system which may involve payment to at least four different levels of government and many methods of taxation. Taxes are levied by the federal government, by the state governments, and often by local governments, which may include counties, municipalities, township, school districts, and other special-purpose districts, which include fire, utility, and transit districts..
    • Forms of taxation include taxes on income, property,sales, imports, payroll, estates and gifts, as well as various fees. When taxation by all government levels taken into consideration, the total taxation as percentage of GDP was approximately a quarter of GDP in 2011 Share of black market in the U.S. economy is very low compared to other countries. Although a federal wealth tax is prohibited by the United States Constitution unless the receipts are distributed to the States by their populations, state and local government property tax amount to a wealth tax on real estate, and because capital gains are taxed on nominal instead of inflation-adjusted profits, the capital gains tax amounts to a wealth tax on the inflation rate.Both liberals and conservatives have called for moreprogressive taxes in the U.S. Fiscal Year 2012 U.S. Federal Receipts Fiscal Year 2012 U.S. Federal Spending