Question

(open-ended question) write a review about the US economy, its social and political infrastructure and how it has changed (briefly) over the centuries. Then explain where you think the US is headed in each of the areas in the next 50 years.

Answer 1

The US is the largest economy in the world, ahead of China. According to the IMF, the economy grew by 2.9% in 2018–an improvement from 2.2% in 2017–and is expected to grow by 2.5% and 1.8% in 2019 and 2020. Coface has estimated GDP growth of 2.9% in 2018 and expects GDP growth of 2.3% in 2019, thus emphasizing the tax reforms of President Donald Trump (which lowered the corporate tax rate from 35% to 21%). The fiscal deficit of the United States stood at-5.1% in 2018, and the IMF forecasts that this trend will continue (-5.6% and -5.5% in the following years). Coface is more negative, with a fiscal deficit of 5.8% in 2018 and a budget deficit of -6.1% in 2019.

In 2018, the Bureau of Labor Statistics calculated a lower inflation rate of 2,44 percent on average. Customs duties on various products will hinge on growth in 2019, including steel and aluminum. Certain risk factors include reduced corporate investment, more costly credit due to tightening the FED's monetary policy, less competitive exports, and increased military spending (USD 80 billion equal to 0.4% of GDP). It is expected that high oil prices will drive the energy sector. After the mid-term elections in November 2018, which cost 40 Republicans their seats, the Democrats ' dominance of the House of Representatives ensures that further reform efforts will face strong resistance

The industrial sector contributes over 19 percent of GDP, including a wide range of activities, and employs 18.82 percent of the workforce. The country is also the world leader in the aerospace and pharmaceutical industries, in addition to the industries mentioned above. The United States has become a pioneer in the manufacture of a variety of minerals due to its abundant natural resources and has been able to maintain diversified growth. The country is the largest liquid natural gas, aluminum, electricity and nuclear energy producer in the world.

Fifty million patients with asthma and allergies already pay for increased costs of health care. Higher greenhouse gas levels allow plants to produce "super pollen." Longer summers have extended the season of allergy. The pollen season is now 25 days longer in some areas than it was in 1995. By 2040, pollen numbers will double. In 15 years, if nothing is done, everyone will feel the effects. Temperatures are going to be 2C hotter than in 1900. Nearly 40% of the world's population would suffer from extreme waves of heat. There would be severe drought for more than 400 million people. The U.S. Southwest will heat up to 5.5 C, causing "super-droughts" that are almost permanent.

In 2019, the U.S. debt was over $22 trillion. After the sequestration kicked in, it had remained stable. With that move, Congress required a compulsory 10 percent cut in the federal budget by 2021. The debt-to-GDP ratio in the United States is 106 percent, a level that is unsustainable as interest rates rise. It will raise the debt interest payments. It is above the International Monetary Fund's estimated 77 percent tipping point.

An outlook is provided by the U.S. Energy Information Administration from 2018 to 2040. It forecast that Brent oil's average price would rise to $85.70 per barrel. Global demand will push oil prices to $92.82/b by 2030. Prices are set to be $106.08/b by 2040. By then, the cheap oil sources will be exhausted, making extracting oil more expensive.

By 2050, there will be $113.56/b in oil prices. In 2022, more crude will be exported by the United States than it imports. Since 1953, it has been a net importer of energy. Oil production will increase to about 12 million barrels of shale oil per day until 2020. Shale accounts for 65% of U.S. oil production.