The economy of the US has undergone tremendous changes over the years. The financial recession that took place in 2008 affected the global economy significantly. The economy of the US plunged to a new low, a phenomenon that had been long forgotten in the history of the United States since the period of the Great Depression (Piketty 48). Economists analyze the economic performance based on some parameters. These parameters include the Gross Domestic Product (GDP), inflation rate and the unemployment rates. All these parameters have improved over the past ten years. The improvement is attributed to the economic policies and stable political environment that promotes growth and development of businesses and investments. The data from FRED website provides reliable information for analyzing the performance of the US economy. For instance, the GDP for the year 2016 was $ 18.57 trillion, the inflation rate was 2.1%, and the unemployment rate was 4.9%. Conversely, in the year 2017, the GDP was $19.36 trillion, inflation was 0.4%, and the unemployment rate was 4.1%.
Comprehensive evaluation of the economic parameters for the two years that is 2016 and 2017 shows clearly the improvement in the economy. The political class is striving to achieve economic success by ensuring that all the core aspects of the nation’s economy are working properly. The GDP of the US increased, the inflation rate decreased, and the unemployment rate also decreased. These developments are inspiring to the sustainability and dominance of the nation as a world leader. The proposed overhaul of the economy under President Trump’s administration is necessary during this time. The recovery of the economy is a gradual process that takes period to achieve (Mook et al. 72). The ten years timeline that the federal government has approximated is sufficient to improve the economy of the US. Through the injection of $200 billion into the infrastructural development, the administration has considered the short-term and long-term goals of the infrastructural reforms. The government can pay for the project by investing in other businesses, increasing income tax rates and reducing spending on other programs hence saving money. It is evident that transport and communication network are essential for the business to be successful. By expanding the infrastructures and other related sectors, more companies will be started. These companies will provide employment to the unemployed thus reducing the unemployment rates. Additionally, the organizations will contribute to the economic prosperity by paying revenues to the government. The taxes are used in financing critical sectors that affect the economy such as health, security, and education.
The economy of the US is powered by energy. Gasoline is a critical product that plays a significant role in shaping the economic trajectory. From the administration proposition, increasing the prices of gasoline will provide the revenues required to drive the infrastructural agenda. Whereas it might seem to be a viable decision, it is arguable that such move will be detrimental to the economy. Increasing the prices of gasoline will increase the cost of production. Such implies that the cost of goods will increase. The purchasing power of the consumers is likely to decrease. Economists argue that such as increase would lower the personal savings of the workers. The number of jobs will decrease. For instance, a company that produces its products expensively will opt to lay off some workers to minimize the production cost and remain viable in the volatile and unstable economy. The gross domestic product of the US will also be affected significantly by such a move. It implies that increasing the taxes on gasoline will have devastating impacts on the economy than its intended purpose of spurring the economic growth.
Conclusively, my opinion on the intended development of the infrastructure is a good move. I believe that economic prosperity of any country is based on the infrastructures and the political goodwill. As such, it is vital for the political class to conduct a comprehensive economic analysis before venturing in landmark decisions that would affect the country.
- https://fred.stlouisfed.org/
- https://www.bea.gov/newsreleases/national/gdp/gdp_glance.htm
- Mook, Laurie, et al. Understanding the social economy of the United States. University of Toronto Press, 2015.
- Piketty, Thomas. “About capital in the twenty-first century.” American Economic Review 105.5 (2015): 48-53.
