This article focusing on The Financial Present & Future of the United States largest economy with abundant natural resources , well-developed infrastructure
The Financial Present and Future of the United States.pdf
1. The Financial Present and Future of the United
States
It is quite remarkable that the United States has been by far the largest economy in
the world. Owing to the fact that the country has abundant natural resources, high
productivity, and well-developed infrastructure constructed via the laws led by the US
constitution along with policies embarked by the United States Capitol. These several
factors ensure long-term financial stability.
Apart from the geographical advantages, the technological advancements made by
the country’s businesses, especially in IT, medical, aeronautical, and military, are
cutting edge. This has led the country to be the most technologically powerful and
innovative economy in the world as well.
With the most significant nominal GDP and net worth in the world, the U.S is a highly
developed nation with a free-market economy. Also, the U.S. dollar, which is
supported by its firm economy and stable government, is the currency that is most
frequently used in international transactions. Globalization has also played an
essential part in the development graph’s constant evolution.
However, the year 2020 tainted the ongoing course of the country, particularly the
economic situation. It is self-evident that the economy has never seen anything like
this before, and it will never be the same again. As a result, there is no turning back
to how things were.
2. Maneuvering through the changes brought on by the pandemic on the economy is
difficult enough as it is also facing a number of unfavorable circumstances
simultaneously. With this ever-evolving outlook, it becomes difficult to comprehend
what to conclude for future endeavors.
The New Normal- Present Scenario
The U.S economy is currently emerging from a period of significant variability. It
recovered swiftly from the pandemic, but the surge in demand has put a strain on
supply networks and led inflation to skyrocket.
Expansionary monetary policies drafted by each state led the support to the
economy of the country as a whole. However, from the largest state of the USA to
the smallest, each and every state perceives the plight differently. Therefore, the
good news is there is no significant repercussion to the country as a whole.
In fact, certain states, in particular saw their revenues plunge. This is because some
policies provided by the fed acted as a relief to states. During the last state of crisis,
the federal government implemented certain policies that come into play when the
situation demands one. In force of these policies, many state and local governments
were forced to reexamine their tax systems and service priorities.
Several renegotiated labor agreements and engaged citizens in productive
conversations about tradeoffs. These steps led to a fruitful situation as all levels of
government are forced to show a tighter connection between revenues raised and
services delivered.
The labor market has improved significantly, and employment has returned to
pre-crisis levels. Moreover, as a result of pandemic supply chain snarls and
insufficient production abroad, an increasing number of US companies are relocating
their production and manufacturing facilities back home. It has evolved into an
initiative to establish production within the country, thereby improving the economic
situation.
This movement of in-house production, as depicted in the Yahoo finance stocks
performance coverage, reduces the gap between supply and demand, which is
reflected in the stock price. But, even if the worst effects of the recession have
subsided, the economy still confronts a number of important hurdles in the future.
3. The Unfamiliar Gist- Future Scenario
The road ahead from here is dainty for the economy, as there are going to be ups and
downs. Certain legislative moves will reduce consumer spending growth to near
zero.
While the headlines of the news bend towards pessimistic charts, the prospects of
the future are unassertive. There is no substantial evidence indicating any malignant
fate of the country. Thanks to the data, tools, and strategies that play an essential
role in asserting.
Today’s economy is likewise more dynamic and entrepreneurial. Technology
valuations have fallen as they have been judged more realistically. The labor market
in the United States is also in better health than it was at the start of prior downturns.
As a result, there are chances that even if the country witnesses a recession, it is
likely to be shallower and less damaging to corporate earnings than the previous
recession. In addition, supply-side limitations and monetary policy will help to keep
inflation under control in the coming years.
Global variables such as Russia’s war with Ukraine, the ongoing pandemic aftermath,
and the possibility of Chinese shutdowns will have an impact on US economic
trends. The Fed would therefore need to move more forcefully to reduce inflation,
hiking interest rates and maintaining them there for a longer length of time.
In Closing:
We’ve learned from the recession that followed the previous financial crisis that
economic models don’t account for intangibles like a company’s willingness to
sustain strategic capital investments during an economic slowdown. Businesses
and their stock compendium perpetuate the economy of this country. Recessions
don’t have a history of lasting very long in this country. The average duration of
recession in the U.S is marked at 11 months.
Monitoring the flow of the resources as well as innovation and the market holding
jobs go hand in hand. While some characteristics can only be examined through the
lens of government laws, the financial system structure of this country appears to be
sound, accommodating inflation shocks.
Pressures on public finances will increase as the economy recovers from the
closure. However, policy support should continue to be available as long as the
economy is operating much below its potential. The continuation of measures up till
the coronavirus is eradicated would interfere with productivity growth.
4. While no one can predict what economic events will unfold in the upcoming period of
time, aiding Americans in re-entering the labor force and acquiring the skills required
to take advantage of new job possibilities will also contribute to the resumption of
the high levels of prosperity enjoyed by the citizens in the past.