What is your assessment of the current US economy What facto

What is your assessment of the current U.S. economy? What factors might affect it either positively or negatively? I realize this line of questioning could easily break down to perspectives from the left and right and politics; let’s try not to allow this and keep the discussion focused on economic theory and principles.

Solution

The current state of the US economy is strong with unemployment numbers coming down and also the minimum wage high which has aided improvements in the standard of living. The recent crack down on visas has also meant that fewer US jobs are being shipped abroad and so more employment is available in the US. This has aided the US working population which has grown in number. The US national debt is however is an issue as it continues to expand and also the fiscal deficit as a share of GDP is high as taxes have been kept low to suit the interests of the public. Several factors could effect the conditions of the economy. Firstly, the Fed changes in monetary policy will effect the economy profoundly. If the Fed reduces interest rates then this will aid investment and the general standard of living but this will effect the overheating of the economy and increase inflation rates if not properly managed. The opening of outsourcing of US jobs to other countries will also effect the economy negatively. Finally, the dollar has been volatile in recent months and this may have a negative effect on the balance of trade and also capital flows.