This paper summarizes the article, “The American Economy” published in The Economist newspaper of 14 July 2012 by Comeback Kid.
The American Economy
The newspaper article begins by identifying a number of forces that negatively affect the American economic performance. On one hand, the newspaper identifies the political force and its effect on the performance of the economy through dictating the kind of policies and reforms. On the other hand, it identifies the private sector which also holds a great stake in defining the direction of the economy. However, the writer observes that despite all these forces, together with a global financial meltdown, the American economy is on the upward trend and it is poised to thrive in the near future considering the remarkable comeback it has shown in various sectors.
The writer argues that this bright prospect in future economy of America has been as a result of a number of reforms some of which have been hard hitting to the overall performance of the country in relation to other countries. For instance, undervaluing of houses to close to 19% below fair value, high capital ratios, consumer cutbacks, growth of consuming market and American banks writing off debts, and raising equity contributed heavily to the economic comeback.
Similarly, the change in exports has ensured that American products remain competitive on the international market. The conventional exports such as Boeing jets, Microsoft software, and Hollywood films are complimented by the “app economy” championed by companies such as Facebook, Apple, and Google. These companies have, besides providing employment to more than 300,000 people, brought resulted into increase in foreign earnings.
Issues/Topics Identified for Future Essays
App economy is not yet fully understood as contributor to economic growth because it is a new sector. Future research in this area will yield a better understanding of its contribution to the growth and sustainability of world economies. Another topic worthy of future analysis is the planned restriction on export of natural gases to help reduce the price of household consumption. This strategy has the detrimental effect of discouraging domestic investment and production and it will be interesting to analyze the strategy in future.
In conclusion, the article exposes a number of important factors that have contributed to the comeback of the American economy after a long stagnation in growth.