Question

Economic growth is a goal that all countries aspire to achieve. Since the end of the Great Recession (2007-2009), growth rates for the U.S. economy have been poor by historical standards. The economy expanded by only 2.4% in 2014, by 2.6% in 2015, but only expanded by 1.6% in 2016. Growth in the first quarter of 2017 was 1.2% but accelerated to 3.1% in the second quarter with 2017 annual economic growth of 2.3%. The annual growth rate for 2018 was 2.9%. Growth slipped to 2.1% in the second quarter of 2019. In the years of recovery since the end of the Great Recession, the U.S. economy has had an average growth rate of 2.2%. During the expansion of the 1990s, the average growth rate for the U.S. was 3.8% per year. From 1947-2007, the U.S. grew at an average rate of approximately 3.4% per year. As a result of the lower levels of growth in recent years, the U.S. economy is producing below our economic potential. With this in mind, what changes (economic, political, social) need to be made in order for the U.S. to progress into a new period of sustained, positive growth?

Answer 1

The biggest issue been surfaced is US China Trade War, Immigration Laws, US National Debt, Foreign Relations policy  

US and china have great history of trade wars however recent times has been largely due to sanctions been imposed on china by USA.

Recently, USA slpped tarrifs on 40% of chinese goods. which has caused prices of US goods to go up substantially becuase cheap imports fro china have been stopped.USA has also stopped cheap imports of steel and as a result Chinese government too has imposed substantial tarrifs on USA goods.

As a result, there has been currency devaluation in China to make it goods look more cheaper and attractive and has started selling Goods in emerging markets. US goods however have become more costlier and hence sales have decreased.

Chinese government has aggravated trade war by imposing fresh round of tarrifs , however before G20 summit which will be held in 2018, such issues will be resolved.

Since, China has imposed tarrifs we see there has been lack of entry of chinese workrs and visas in USA which has nullified the clear cut winner. Because of trade war, India has managed to export steel and aluminium to US markets and hence has been the greatest beneficiary.

Given the need of the hour following economic strategies need best case implementation :

Resolution of NAFTA deal with negotiation as well as maintenance of great relationships with South Korea on denuclearization by maintaining an eye on all developments
US China pact and removal of tarriffs by signing of MOU and economic cooperation
Immigration laws been relaxed by allowing H1B for Indians who look to create startups IN UsA and generate more employment
Debt refinancing and additional taxation on corporates with large market Capitalization to decrease debt in short term.
Decreasing interest rates, SLR and CRR to depreciate dollar, boost exports and maintenance of higher money supply in market to increase consumption levels and hence higher GDP.

References:

Bailey, Martin Neil, What Happened to The Great American Job Machine!? The impact of trade and electronic Offshoring.

Cline, William R 2004. Trade policy and Global Poverty. Washington : Institute for International economics

Goldman Sachs, 2003. Dreaming with BRICS: the path to 2050. Goldman Sachs Global Economics paper 99

Zoelick, Robert B 2001. American Trade Leadership : What is at Stake? Speech before Institute of International Economics washing mton, September 24.

Schott, Jeffrey, 2004. Free trade agreements :US strategy and Priorities. Washington: Institute for International economics  

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