Capital in the Twenty-First Century, Essay Example

It is important for both the citizens of the United States and the government to be concerned with the economic standing of the country. Ultimately, economic stability and growth is related to the quality of lifestyle that people in the country are able to experience. When the economy is strong, people are more comfortable and need to work less in order to earn a living wage. However, when the economy is weak, people are often out of work. Therefore, the current macroeconomic situation has the potential to cause a major impact on people living in the United States. Furthermore, it is important for state and national representation to understand these impacts and determine how fiscal and monetary policies can be used to support the economic well-being of the nation.

In the United States, the current unemployment rate is approximately 5.6%, which is among the lowest that it has been for a long period of time (Piketty, 2014). This indicates that the economy is stronger than it had been in a while. Furthermore, this change is likely a result of some of the employment programs that President Obama put in place to help economically disadvantaged citizens within the country (Sommers, 2007). While this number is not zero, it indicates that there are some members of the working population who are eligible for employment, but are not working either by choice or because they are unable to find work. Therefore, even in very strong economic conditions, this number would not get much lower than 5%.

According to the United States government, inflation has decreased by -0.2% since 2014. This is an important component of the macroeconomic situation. Inflation is decreasing because growth rate of unemployment is above the natural rate of growth. This happens when the government promotes policies that promote jobs over growing the economy. In this current situation, the inflation change has not had a major impact on the United States because it has deceased only very slightly. Overall the deflation is good because it means that goods and services will become more affordable.

In addition, while the United States is not currently considered to be in a recession, economists have determined that the GDP growth of the country was only 0.2% in 2015. Many professionals believe that this is a sign indicating that a recession may be occurring in the future. In order to prevent this from happening, it is important for politicians to promote business exchanges locally, nationally, and internationally. While the growth of GDP is related to the tendency for a recession to occur and inflation to change, it is important to consider these factors both independently and together in order to determine how the economy can be improved.

While there are many economic factors that cannot be controlled, politicians have many opportunities to intervene in order to improve the economy. It is important for these individuals to consider all aspects of these factors when making decisions that can impact the well-being of the entire nation. Furthermore, politicians can look at strong and successful economies in other countries to serve as models for policy in the United States. An example of this is the success of China, which recently became a major competitor in the world market place due to its rapidly expanding trade practices. Therefore, to expand its economy, it would be beneficial for the United States to participate in these trade practices as well.

References

Piketty, Thomas (2014). Capital in the Twenty-First Century. Belknap Press.

Sommers, B. D. (2007). Why Millions Of Children Eligible For Medicaid And SCHIP Are Uninsured: Poor Retention Versus Poor Take-Up. Health Affairs, 26(5): w560–w567.