Jun 282013
 

major weaknesses of the US economyThe U.S. economy is the best economy in the world, with one of the highest GDP per capita figures. No matter U.S. has the strongest and most powerful economy overall, it now faces many difficult economic problems. Some of these problems are short term and they can be sorted out over time. Over the month, the value of the US dollar provides the deeply important as well as a decreasing to a record low up against the Euro and the 31 years low up against the Canadian dollar.

 

If we (our government) do not take any serious measures, the U.S. is going to face an economic disaster on the scale few countries have ever experienced. Most people are not aware the easily observable signs of this critical economic situation, they do not know where it originated from and what measures or steps are necessary to prevent it from occurring. U.S. citizens have a superpower mentality in their minds, but this is not true anymore. We are slowly becoming to lose our position as a leading country in lots of aspects of our social, economic and political spheres.

Some of the major weaknesses faced by U.S. economy today are listed below:

Import/export ratio

The major weakness of the U.S. economy is the import/export ratio and the fact that we import significantly more goods than we export to other countries. This trade deficit will tend to increase in the next few years if our government does not take radical measures and programs, and if they don’t we are most likely to experience another economic depression.

Low financial savings ratio

It has been widely suggested that the artificial economic growth has been based on an unsustainable footing. The U.S. residents’ financial savings have fallen precipitously and it is a direct result of the current account deficit. Also, this situation is closely related to the consumer-led recession, increased personal credit levels, and extremely high credit card debt per household.

Housing market place

It is a well-known fact that US house charges have fallen in previous 12 months. Although there are various ways to measure house price stats, most economic experts agree that US house prices usually double every 10 years. There is a mixture of oversupply and falling demand because of uncertainty about the near future of the housing industry. If the government find a way to impose a further decline in residential property prices, it could be a powerful incentive for consumer spending and it would stimulate the economy a little, because more spending would really help the economy recover.

Latest Account deficit as well as External Debt

In the last two decades, the U.S. economic growth was mostly been backed up by high degrees of consumer spending. This consumer spending has created an increase throughout imports that has not been met by the corresponding increase of exports.

National personal debt and Government Funding

Due to decades of government grants to pay off student loans and other types of government borrowing, North America national debt can be fast approaching more than 65% of GDP. The consequence involving such high degrees of national debt always increases the cost of interest payments.

Tighter Personal Policy

Higher costs for the foreign country imports will be the right way to boost the use of locally manufactured goods. Usually, the government slows down the economy and raise tax revenue to prevent inflation, but I do not think that it is a good idea. Also, a flow of money from the bank to the public gets reduced in order to stop inflation. With oil charges hovering around $80 a barrel as well as the dollar falling over the floor, inflation is certain to pick up within the coming months.

Final Thoughts

I believe in our government and its competitiveness to lead our country in this economic recovery period, and I know they’ll find a way to lead us to a better feature with fewer worries about economic matters so we can all have a peacefull and prosperous life.

 

  2 Responses to “What are the major weaknesses of the U.S. economy?”

  1. […] are many weaknesses of the U.S. economy. Household debts are unchanged and constant at 3.3 percent, below the figure of 2009. If industrial […]

  2. […] to the presented forecasts, it is assumed that the US economy in the first quarter of this year will reduce the growth rate to 3.1% from 3.2% a year earlier. In […]

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