The United States economy is the largest and most important market globally. The Council on Competitiveness states the fact that the United States accounted for 1/3 of the world’s entire economic expansion in the decade between 1995 and 2005. Exports went mostly towards developing countries which, in 2006, accounted for 47 per cent. It is considered a stalwart example of an open economy and a free market economy.
The US economiy is in first place in the world in terms of: economic output, total imports ($2.2 trillion in 2006), trade deficit, inflow of foreign investment, external debt, foreign investment destination, source of remittances to South America and the Caribbean from these countries’ migrating people. The US has about $200 billion holdings of reserve assets, on the fifth place in the world after China's economy, the Japan economy, the South Korea economy and the Taiwan economy. The US is also the biggest consumer of petroleum and oil imports.
The agriculture and energy sectors are protected by government regulations. 35% of the country’s economy is influenced by the American consumer, which also has a great impact on the
world’s economy. Renewable energy is growing in importance.Monetary and fiscal policies are controlled by the government which does its best to keep the country’s social and economic stability. The Federal Government uses certain economic tools to control the economic growth: money supply, credit control and tax rates. The Government’s role is crucial for the prosperous economic activity. It also supports research, development, construction and defense programs.
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| The US Economy |
Efforts are being made in order to control prices, in a more or less direct manner. In general, the government tried to stop the existence of monopolies. It tries to maintain an economic growth, a low level of unemployment and a low inflation level through fiscal policy, including taxes, and by controlling the supply of money through changes in interest rates. In 1913 the Federal Reserve was formed, an independent central bank. It is used to provide monetary policy and a stable currency. The American Dollar is one of the most stable currencies, but its reserve currency status is not as high as it used to be prior to its depreciation in value.
The Government also supports individuals and businesses, to which it provides technical assistance and loans with a low interest. College students are also able to receive helpful loans. Employees and employers pay a tax which finances Social Security. The elderly and the families which have a low income are helped with their medical costs through a program called Medicare. This program started being applied in the 1960s.
