Many uncertainties are surrounding the government of the United States and are affecting the U.S. economy. In this post, we look at the top six economic trends that the government must pay attention to. There is no way the government can do away with them due to the amount of pressure that surrounds it.
Climate change is causing a more natural disaster
The climate of the U.S. is changing very fast due to the result of global warming and hence leading to increased greenhouse gases. The country experience very extreme hot days hence causing the prices of food to rise.
According to the research done by John P. Holdren, climate change can lead to unpredictable storms, droughts, and floods.
Extreme floods have hit U.S. coastal towns such as Miami Florida more than five times due to the rising sea levels.
The frequency of U.S. wildfires has increased extremely by 400% since 1970. The one that happened in 2017 was the most destructive of all in recent history. The fire burnt around 9.1 million acres in the United States. The U.S. forest service spent almost $2.5 billion which is more than $1.4 billion that was spent in 2016.
Financial markets control oil, gas and food prices
The supply and demand have become less important in the control of prices. Instead, the prices for the oil, gas, and food are controlled by the commodity traders. The value of the dollar is determined by the foreign exchange traders.
The transaction speed also increased economic volatility. The prices of valuable commodities such as gas and oil rose up and down depending on the moods of investors. This leads to higher food costs.
In the year 2011, the prices of gold hit extremely high. The following year the interest rates hit a 200 year low. This made the dollar value to rise up to 25% in the year 2014 and 2015.
The decline of the Global Economic Power
Before the recession, The U.S. was the world’s only superpower. In the year 2009, the G-20 took center stage in the global economy. That organization gives more clout to China, Russia, India, and Brazil. These countries survived the recession better than Europe and the United States did. Their strong economies gave them the leverage to demand more global power.
That shift in global economic power has contributed to American unease. It is behind the attacks on free trade, job outsourcing, and currency manipulation.
The economy is in the expansion phase
The phases of the business cycle are like the seasons in the year. The 2008 financial crisis was so devastating that the economy took seven years to return to robustness. That was delayed by the U.S. debt crisis in 201, the cliff in the year 2012 and the government shutdown in 2013 and also the shutdown in 2019 hence affecting the economic growth.
Now the U.S is still in the expansion phase. The economy can remain in this phase for several more years. But at some point, it will go into its peak phase.
The U.S. is going through so many economic trends but hopefully by 2021 things will be better.
Let’s now hear from you, how do you see the economy of the United States? Kindly share with us your opinion in the comment section