This site presents four analyses of the United States of America government's economic policies compared to a list of 34 economic policies as prepared by students Brian Collica, Emma Hogan, Liam Azulay and Hanna Battla with the Mike P. McKeever Institute of Economic Policy Analysis (MIEPA). These studies were written in December of 2017. To read the analyses scroll through this site. To learn more about the background policies, click here
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Four studies of the economic policies of the United States of America are presented here. The first study presented is by native born United States student Brian Collica. Specialist Brian Collica's analysis is presented immediately below. To read further studies by other native born Specialists, scroll through Specialist Brian Collica's study. The ratings herein are based on the following rating scale:
5.0 Perfect Facilitation of Wealth Creation
4.0 Midway between Perfect and Neutral
3.0 Neutral Effect on Wealth Creation
2.0 Midway between Neutral and Obstructionist
1.0 Perfectly Obstructionist to Wealth Creation
[Rating scale copyright Mike P. McKeever, 2018. Used herein with permission]
RATING SUMMARY - BRIAN COLLICA POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE 1 4.9 14.7 15.0 98 % 2 4.5 13.5 15.0 90 3 2.8 8.4 15.0 56 4 4.7 14.1 15.0 94 5 3.9 11.7 15.0 78 6 4.5 13.5 15.0 90 7 5.0 15.0 15.0 100 8 4.1 12.3 15.0 82 9 2.9 8.7 15.0 58 10 5.0 15.0 15.0 100 11 3.2 9.6 15.0 64 12 5.0 10.0 10.0 100 13 3.9 7.8 10.0 78 14 5.0 10.0 10.0 100 15 4.7 9.4 10.0 94 16 3.1 6.2 10.0 62 17 4.3 8.6 10.0 86 18 4.6 9.2 10.0 92 19 2.4 4.8 10.0 48 20 4.3 8.6 10.0 86 21 3.5 7.0 10.0 70 22 1.7 3.4 10.0 34 23 4.5 9.0 10.0 90 24 4.8 9.6 10.0 96 25 3.3 6.6 10.0 66 26 2.1 4.2 10.0 42 27 5.0 10.0 10.0 100 28 4.2 8.4 10.0 84 29 3.5 3.5 5.0 70 30 3.2 3.2 5.0 64 31 5.0 5.0 5.0 100 32 4.1 4.1 5.0 82 33 5.0 5.0 5.0 100 34 2.3 2.3 5.0 46 TOTAL 135.0 292.4 365.0 80.1% ===== ====== ===== =====
INDIVIDUAL POLICIES - BRIAN COLLICA1. Freedom from internal control - 4.9
The US Constitution defines Freedom of Movement as a fundamental Constitutional right. Americans are free to legally travel anywhere within the US and cross state lines as they please. Similarly, Americans are not prohibited from starting businesses or conducting business in other states. Each state does, however, have its own business licensing requirements, and some individuals may find it a hinderance to navigate or comply with such regulations.
One exception where the government can restrict the movement of the American people is by imposing a curfew. Curfews are set by local state or municipal governments, not the federal level. Most states and cities have curfews for juveniles that restrict the movements of unaccompanied minors at late hours. Individual cities can also issue curfews for all citizens in times of severe and dangerous weather or during times of political unrest. In 2015, the city of Baltimore responded to ongoing protests by enacting a five day long curfew which prohibited all citizens from leaving their homes between the hours of 10pm and 5am. In the case of any government imposed curfew, exceptions are made for people going to or coming from work, medical emergencies, elected officials, law enforcement personnel, first responders, medical workers, and mass media.
2. Freedom of speech - 4.5
The US receives a high score regarding freedom of speech since Americans are free to exchange thoughts and ideas as long as they don’t infringe upon the rights of or cause immediate harm to other people. The First Amendment to the US Constitution grants citizens the freedom of speech and expression and protects them from the government passing any law which restricts it. While freedom of speech is granted to all people, the law defines different types of speech and some restrictions are made regarding those. For example, the law protects speech that criticizes the government or promotes distasteful ideas, but the law does not necessarily protect obscenity, threats, or speech that incites imminent lawless action. In general, free speech is only protected from government restriction, not from the restriction of individuals or private businesses. Businesses are allowed to reasonably restrict the speech of their employees. The government can, however, restrict speech that compromises national security or reveals military secrets.
Because the law cannot cover every single possible circumstance, a person’s right to freedom of speech in a particular situation is often decided in court. Many court cases have ruled in favor or against an individual’s right to free speech. In 1943, the case of West Virginia Board of Education v. Barnette granted people the right not to speak, specifically not to salute the American flag. The 1988 case of Hazelwood School District v. Kuhlmeier did not protect the rights of students to print articles in a school newspaper over the objections of the school administration because that particular newspaper was not established as a forum for free expression.
3. Effective, fair police force - 2.8
While the police force annually ranks among the most trusted of US institutions, it also has a long history of unfavorable media attention regarding the unfair treatment of minorities. According to Gallup’s annual Confidence in Institutions poll, 57% of Americans had significant confidence in the US police force in 2017. Results from the poll show that only the small businesses category receives a consistently higher ranking than the police force. In recent years, however, the unfair treatment of minorities at the hands of police has been the topic of many riots, protests, and social justice movements.
Between 2014 and 2015, riots and protests broke out in several cities across America including Ferguson, Baltimore, and Oakland, all of which were related to police shootings of unarmed black men. Research does show several disparities in the justice system that do not favor people of color. A Stanford study conducted between 2011 - 2015 showed that not only do police officers pull over black drivers at a higher rate than white drivers, but black drivers are 20% more likely to receive a traffic ticket than white drivers. More seriously, in 2016 the American Journal of Public Health released data showing that African Americans, American Indians, and Alaska natives were three times as likely to be killed by police than white people, while Hispanics were twice as likely to be killed a white people.
Despite the negative statistics, a Pew Research poll released in 2017 showed that two thirds of the nation’s police officers viewed deaths of black Americans during police encounters as isolated incidents and not a a sign of broader issues concerning police bias. This unbalanced view of the police force has the potential to hinder business growth, particularly in areas with higher minority populations.
4. Private property - 2.7
Although the US has various laws protecting private property, not all of the laws are uniform and many can be misinterpreted in court. The US receives a low score due to the inconsistencies of its property laws. The underlying definition of property includes not only the ownership of something, but the unrestricted right of use, enjoyment, and disposal of said object, land, or invention. In terms of real estate, people are free to purchase and sell their land as they see fit; however depending on the local zoning laws, they may not always be able to build whatever they like on their property or do whatever they want on it. These zoning laws can vary from city to city. The laws protecting intellectual property are very extensive, but as technology develops, more and more questions arise as to what constitutes a violation of intellectual property. With big companies such as Apple, Google, and Uber constantly developing new technology, more and more lawsuits have arisen based around intellectual property disputes.
The Fifth Amendment of the US Constitution states that “no person shall be…deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.” The last part of this statement supposedly restricts the US governments use of eminent domain, the right of the federal or state government to take private property for public use as long as they compensate the owner with the fair market value of the property. The reality is that eminent domain can be misused and “public use” can be interpreted many different ways. In the 2002 case of Kelo vs. The City of New London, the local government seized private property and transferred ownership to a private developer. The court ruled in favor of the city by defining “public use” to be essentially anything that benefits the local economy. As a result, many states reexamined their property laws.
5. Commercial banks - 3.9
As a result of events such as the Great Recession of 2008 - 2009, consumer confidence in US commercial banks has slightly waned. The US employs the fractional reserve system for all of its commercial banks which are overseen by the Federal Reserve. By only keeping a fraction of their deposit liabilities on hand, it becomes much easier for individuals to get loans to start businesses, thus increasing the supply of money in the economy and promoting growth. In 1933, the Glass-Steagall Act mandated the separation of commercial banks from investment banks and also from insurance companies. Moving forward, commercial banks would accept deposits and make loans while investment banks generally raised capital for firms or acted as underwriters for companies wishing to go public.
In 1999, the part of the Glass-Steagall Act that prohibiting bank holding companies from owning other financial institutions was repealed. Some people claim this repeal was directly responsible for the financial crisis of 2007-2010. By allowing banks to merge with and own other financial institutions, banks became large corporations that made riskier, or even foolish, investments based on the confidence that they were too big to fail.
Traditional bank loans are still a popular way of securing funds for starting a business, however; many people are turning to alternative loan sources such as credit unions or online banking. Since credit unions are non-profit, they can generally offer loan interest rates that are lower than traditional commercial banks. Credit unions are also cooperatives owned and operated by its members which instills confidence from borrowers.
6. Communication systems - 4.5
Even though the dominance of the US communications infrastructure is challenged by only a few other countries, there are still some parts of the US that are technologically cut off. With tens of thousands of television and radio broadcasting channels, both private and public, Americans can have their pick of what they want to watch or listen to. As of 2016, the US ranked third in the world for number of fixed line telephone subscriptions and fifth in the world for number of mobile telephone subscriptions. However, out of the three single countries, European Union excluded, that had more mobile phone subscriptions than the US, only Indonesia had a higher percentage in relation to population. The only single country that surpasses the US for number of internet users is China with 246.8 million and 730.7 million respectively. However, in 2016 the percentage of the US population that had access to and used the internet was around 74% while in China is was about 50%.
With the ever expanding reliance on the internet for modern day life, it is more and more important for Americans to have access to not just internet, but fast internet. The Federal Communications Commission’s 2016 Broadband Progress Report estimated that about 10% of Americans do not have access to broadband speed internet. Internet connections in rural areas are typically much slower and can be more expensive. The report says that 39% of rural Americans do not have access to high speed internet. If we want to make sure the rest of our country is able to keep up with the modern world, fast internet should be both accessible and affordable.
7. Transportation - 5.0
When it comes to transportation, the US leads all other countries in terms of kilometers of roadway, railway, and pipeline as well as number of airports. The majority of short distance passenger travel occurs by automobile and most long distance passenger travel is by airplane. Railway is the most common mode of transportation for cargo followed by truck, pipeline, and boat.
Virtually all parts of the mainland US are accessible by automobile. Several interstate roads connect almost every major US cities. The nearly 9.7 million kilometers of rural roads is more than double the 4.4 million kilometers of urban roads, meaning that even some of the more remote communities are easily accessible. And with over 5,000 airports, Americans are never more than a day’s journey to anywhere else in the country.
The only exception is the state of Alaska. The state’s road system only covers a small percentage of the total area leaving many places only accessible by ferry, air, or other means. This makes sense as Alaska is the least densely populated state. And since it is also the 3rd least populous state in the US, accounting for only 0.23% of the entire country’s population, the lack of an expansive transportation infrastructure does not hold back the rest of the US from developing.
8. Education - 4.1
According to a 2012-2014 survey by the Program for the International Assessment of Adult Competencies, the US literacy test scores are comparable to other industrialized countries such as Germany and the United Kingdom, but fall behind other high ranking countries such as Norway, Denmark, and Japan. The National Center for Education Statistics estimated that in 2011, the enrollment rate for American children between the ages of 3 - 4 was 64% whereas the rate was over 90% in France, Germany, Italy, and the United Kingdom. For ages 5 - 14, the US enrollment rate was over 90%, similar to that of other industrialized countries. But for ages 15 - 19, the US was at 80% enrollment while Germany was at 92%. These last statistics can be misleading only because compulsory education in the US ends at age 17 while in Germany, attendance is required until age 18. Between ages 20 - 29, the US enrollment rate of 27% was much better than the UK rate of 19% and fairly comparable to Canada (25%) and Germany (32%).
As far as quality of education, the US ranking may actually be better than it appears. When looking at international assessment tests such as the PISA and the TIMMS, the US scores are equal to or better than most countries. According to the PISA, which tests 15 year old students, only 18 out of 70 countries scored higher than the US for science while only 14 countries scored higher for reading. The TIMMS, which tests 4th and 8th graders, showed that only 7 countries scored higher than the US for science. In 2016, the Times Higher Education World University Ranking comprised a list of the best 800 colleges and universities from 70 different countries. US institutions made up 147 of them with 63 ranking in the top 200 and 3 ranking in the top 5.
While it’s clear that the US has some of the best educational institutions in the world, not everyone can afford them. The US has some of the highest tuition costs when compared to other advanced countries. While most primary and secondary education is paid for in US tax dollars, the average annual expenditure per student for higher education is $19,700. The second highest reported annual expenditure was Canada at $15,100. Unless more programs are designed to promote the education of low income individuals, the highest quality of education may only be reserved for the wealthy. https://nces.ed.gov/pubs2016/2016100/
9. Social Mobility - 2.9
Despite data that shows a generally poor ranking for social mobility when compared to other industrialized countries, the will and determination of the American people to succeed gives the US a score only slightly below average. Studies have shown that social mobility across the US can vary depending on factors such as geographical location and current income levels. For children born into low income families in cities like San Francisco or Washington DC, the chances of them rising into the top fifth of income distribution can be as high as 12%, which is similar to some of the top-ranking countries for social mobility like Norway and Denmark. On the other hand, low income children in cities like Charlotte or Milwaukee only have a 4.4% change of rising to the higher ranks. Additionally, children that are born into wealthy families are more likely to remain in higher tiers of income distribution. Children with parents in the top 1% of earnings are 77 times more likely to get into an Ivy league college or equivalent than children with parents in the bottom 20%. Studies have also shown that while the actual rates for social mobility in the US have not changed in the past 20 years, the income distribution has, which plays a role in a person’s likelihood to move up in society.
While lower income children may find it more difficult to rise up in society, the American people remain strong with a positive outlook towards success. Based on data between 1998 - 2001, the International Social Survey Program showed that the vast majority of Americans believe people get rewarded for their skills, intelligence, and effort. Also, very few Americans believe that coming from a wealthy family is essential or very important to getting ahead in life. In regards to the government, a small minority of Americans feel it is the government’s responsibility to reduce the differences in income. Despite that, the government does have laws that protect citizens against discrimination in the hiring process. The US Equal Employment Opportunity Commission is responsible for enforcing federal laws that ensure all people are treated fairly and given an equal chance when being considered for hire.
10. Freedom from outside control - 5.0
In general, US citizens are not subject to any laws of foreign countries while on US soil. Our day to day choices are not governed by any outside legislature or influence. However, once a US citizen travels out of the country, they must abide by the laws of whatever country they enter. If a US citizen commits a crime in a foreign country and is able to return home, there are certain circumstances where they are still protected from the law. The US has extradition treaties with over 100 countries. The US will generally only extradite its own citizens to countries with which it has treaty. In situations where the US is not obligated to extradite a citizen to a particular country, the Secretary of State may intervene and order the extradition if deemed appropriate.
One exception of protection against foreign law would be people who hold dual citizenship or are also legal residents of foreign countries. For example, if a US national who is also a resident or citizen of a foreign country is forced into compulsory military service of that foreign country, the US cannot intervene and that person must follow the law of the foreign country.
11. Protection of Domestic Enterprises - 3.2
While the US has successfully grown some of its key export industries, it has failed in expanding others due to factors such as free trade agreements. In 2016, the foreign trade deficit was over -$504 billion. The US consistently shows a trade deficit with imports exceeding exports every year since 1969. Numerous free trade agreements with other countries prohibit the US from imposing new tariffs on imported goods from those countries. It also means that while US products may be exported easily between trade partners, those countries may not buy our products because our high cost of labor makes our prices too high.
The top two US export industries are automotive and refined petroleum. Throughout history, the US government has supported both of these industries by creating new opportunities for oil drilling or by bailing out the major automotive companies in 2008. While US oil production today is approaching record highs, US automotive production is lower than it was before the 2008 crisis. Despite government support, the US automotive industry cannot compete with cheaper and more reliable foreign alternatives in either the domestic or global markets due to free trade agreements and high production costs. Because some industries are protected while others are not, the US receives a natural score.
12. Foreign currency transactions - 5.0
All transactions conducted in the US are done using US currency. If someone wishes to use foreign currency, they must first convert it to US dollars. That can happen physically at a bank or instantaneously via electronic transactions. Credit companies usually charge customers for this service in the form of a foreign transaction fee. Many banks will allow customers to hold foreign currency in a special account in order to conduct business more effectively overseas and avoid hefty transaction fees, however this currency is always converted to US dollars before being used in any domestic transaction.
Some domestic merchants accept other forms of currency such as Bitcoin, an electronic based cryptocurrency. Bitcoin itself represents a certain value that can be converted to US dollars. So even when a merchant accepts Bitcoin as a form of payment, the Bitcoin is first converted into US dollars by a third party and then passed on to the merchant.
13. Border control - 3.9
While the number of individuals apprehended at the US border has decreased, many parts of the US border still remain vulnerable. The US has over 6,000 miles of land border with Canada and Mexico all of which are under the responsibility of the US Border Patrol. The Border Patrol was originally created by Congress in 1924 as a response to illegal immigration. Now, the focus is more on the detection, apprehension, and deterrence of terrorists, weapons, drugs, and human cargo. After the attacks on 9/11, the number of Border Patrol agents more than doubled from 9,100 to 18,500. Reports have shown that due to the increase in Border Patrol agents and tighter security measures, the number of people apprehended at the border has gone down, mostly because of deterrence.
Even with declining attempts of illegal border crossings, the US-Mexico border has hundreds of miles with virtually no protection of any kind. Fences, vehicle blockades, and even walls have been erected in hotspots along the border, but nearly half is left unprotected. With the majority of illegal crossings happening through the US-Mexican border, even more deterrence could be used to make sure individual with illicit agendas do not enter the country. For this reason, the US receives a score of 3.9 with area for improvement.
14. Currency - 5.0
The only official currency accepted in the US are the notes issued by the Federal Reserve Bank and coins produced by the US Mint. Notes are printed by the Bureau of Engraving and Printing within the US Treasury Department. The Federal Reserve works closely with other agencies such as the Secret Service to protect against counterfeit currency production since other banks or institutions are not allowed to issue or print US dollars.
One exception is that many banks will accept foreign currency and exchange it for US dollars. Many banks will also exchange US dollars into foreign currency as well. In addition, members of certain banks can set up accounts that hold one or more foreign currencies at a time. These accounts are typically for businesses that conduct several transactions with businesses in other countries.
15. Cultural, language homogeneity - 4.7
According to the 2010 Census, 72% of Americans identified as White which includes people of both Hispanic and non-Hispanic origin. About 13% of the total population identified as black or African-American and 5% identified as Asian. The census also reported in 2015 that about 79% of Americans spoke only English at home. While the US does not officially have a national language, English is the preferred language at home and in business. Similarly, there is no national religion, but about 70% of Americans identify as Christian with the largest group behind that identifying as Religiously Unaffiliated at 22%. Also, many Americans partake in the same cultural events or holidays with 92% of Americans celebrating Christmas even if they are not Christians.
The US is growing more diverse with the estimated amount of people claiming only one race continually falling. In general, larger cities are more diverse than rural areas. However, any increase in ethnic or cultural diversity does not seem to be hindering business growth. In fact, America attempts to celebrate and encourage its diversity especially in the corporate workplace. In 2012, The US Small Business Administration estimated that 29% of businesses nationwide were majority-owned by minorities.
16. Political effectiveness - 3.1
The US has conducted itself both effectively and ineffectively in response to domestic disasters whether they are natural or manmade. Since the catastrophic failure of the emergency response to hurricane Katrina in 2005, the US has greatly improved its disaster relief efforts. Specifically regarding hurricanes Harvey and Irma in 2017, the response of agencies such as the Federal Emergency Management Agency (FEMA) helped to ensure that proper measures were set in place before the storms even hit.
On the other hand, the political response to mass shootings in America appears to be almost non-existent. Four of the five deadliest mass shootings in the US have occurred within the last ten years, and gun control laws have continually relaxed since the 1970s. This is due mostly to the political influence of the National Rifle Association (NRA). The NRA contributes millions of dollars each year to influencing gun legislature. Most of its budget comes from its members, which are substantial, and corporate sponsors. Many politicians are afraid of supporting gun control for fear of political backlash from the NRA and potentially not being re-elected.
17. Institutional stability - 4.3
The US has a rich history of establishing long lasting institutions. From universities founded in the 1600s to the formation of the FBI in 1935, many US institutions have stood the test of time. The way we elect our president, the formation of the supreme court, and the structure of Congress have all existed since 1789.
While US institutional stability remains strong, almost all of our core institutions are subject to reform every once in a while. The most recent noteworthy change was the passing of the Affordable Care Act in 2010 which changed the way many Americans receive or pay for healthcare. The bill was met with severe political opposition and is currently under threat of being repealed. Frequent changes to important services such as healthcare can cause many people to feel uneasy about the future and potentially inhibit business investment.
Sometimes these institutions undergo reform in an effort to increase transparency, thus creating more public assurance. Recent discussions about racial disparity have led to several local police departments to change their policies, replace leadership, and implement new effective training methods aimed at preserving life. In these cases, the institutions themselves aren’t changing, only the methods under which they operate. Because the majority of these institutions ensure predictability, the US receives a higher score.
18. Honest government - 4.6
According to the Corruption Perceptions Index put together by Transparency International, the US was ranked 18th out of 176 countries for being the least corrupt in 2016. In general, a higher ranking implies that a country has significant freedom of the press, public spending records are accessible and transparent, and there are high standards of integrity for public officials and judicial systems. The First Amendment of the US Constitution ensures the freedom of the press. Additionally, annual federal budget reports and government expenditures are made public and easily accessible.
The US is not considered overly corrupt, even though political corruption does exist. There are laws such as the Bipartisan Campaign Reform Act of 2002 that place regulations on campaign funding for federal office positions as well as requiring levels of transparency as to where the money comes from. However, these laws do not apply at the state level. Each state is responsible for passing its own laws regulating campaign funding. Arizona, for example, has very few laws that restrict anonymous campaign donations. While campaign funding from undisclosed sources can lead to conflicts of interest and corruption, the continued call for transparency keeps illicit political agendas in check.
19. Common laws - 2.4
It seems in America, the rich are able to either buy their way out of jail or can get away with committing crimes simply for being rich. Research has implied that the more money a person has, the less likely they are to serve jail time if charged with a crime. One study of the US bail system in particular suggests that if an arrested individual is not able to make bail at the time of arraignment, they are far more likely to be convicted of their crime In 2008, only 13% of defendants arrested in non-felony charges that were given a bail of $1,000 or less were able to afford it. That means the other 87% had to stay in jail until their court date and were more likely to be convicted. Research shows that if bail is posted, at least half of the cases get dismissed and most result in no jail time at all.
One instance in particular of a rich person being treated favorably was the 2013 case of teenager Ethan Couch who killed four people and injured eleven while driving drunk in a stolen truck. Couch was only sentenced to 10 years of probation because his defense claimed he suffered from “affluenza,” a condition which prevented Couch from realizing the consequences of his actions because he had grown up wealthy and privileged. Couch’s father was also charged for a separate incident in 2014 for impersonating a Texas police officer. He was only sentenced to one year of probation while according to Texas law, impersonating a public servant is a third degree felony warranting a minimum of two years in jail. The US receives a low score for the economic disparity in its justice system
20. Central bank. Score - 4.3
The Federal Reserve is technically independent within the US government and not independent from the US government While it is subject to Congressional oversight and is required to give its profits to the US Treasury, it has complete authority over monetary policy and does not require Presidential approval. The Federal Reserve itself was created by the US government in 1913 to serve as the nation’s central banking system. There is a Board of Governors that leads the Federal Reserve whose members are appointed by the President of the US. There are also 12 regional Federal Reserve banks around the country which oversee and regulate the privately owned commercial banks in that region. Each regional Federal Reserve bank has a president elected by the commercial banks it oversees.
It is the goal of the Federal Reserve to promote US economic growth with methods including, but not limited to, maximizing employment, preventing inflation or deflation, and moderating long term interest rates. The Federal Reserve also acts at the US government’s bank by holding revenue deposits and issuing spending withdrawals. While the US central bank is not officially controlled by the government, it is implied that the central bank will make monetary policy decisions that are in line with the US economic agenda.
21. Domestic budget management. Score - 3.5
While the budget deficit appears to be appropriately managed, the inability of Congress to consistently agree can hinder business development. For this, the US receives a score slightly above neutral. The average range for the deficit is usually between -4% and -2% of GDP. In 2016, government revenue totaled $2.99 trillion while spending was $3.54 trillion resulting in a deficit of -$552 billion, nearly -3.3%. This follows recent trends in the US budget with deficits of -4.1%, -2.8%, and -2.5% for 2013, 2014, and 2015 respectively. The US has not had a deficit exceeding -10% since World War II, with the closest being -9.8% in 2009. Very few years on record show a surplus in the federal budget. The last time a consistent surplus occurred was between 1998 and 2001. Before that, the US had not seen a budget surplus since 1969.
In order for there to be a budget in the first place, Congress must agree on the terms set forth in the budget proposal for the next fiscal year. If Congress cannot agree and pass the budget legislation by the appropriate deadline, the result is a shutdown of government services. Since 1976 there has been 18 gaps in budget funding with 7 of them resulting in government employees being furloughed. The most recent shutdown in 2013 led to an estimated $24 billion being taken out of the economy and stunted fourth quarter GDP growth by 0.6%.
22. Government debt. Score - 1.7
As of December 31, 2016, the US public debt was $19.97 trillion along with a foreign debt of $6 trillion. The total debt combined was $25.97 trillion. With a estimated 2016 GDP of $18.569 trillion, the combined US national debt accounted for 139% of GDP. This essentially means the US owed more money than the value of all the goods and services in produced in 2016. To put it in perspective, the European Union does not allow countries to adopt the euro currency if that country’s gross national debt exceeds 60% of its GDP.
This represents a staggering amount of debt owed by the US government. While the majority of the debt is held by the US public, that amount alone still exceeds the US GDP. Continued borrowing in an effort to reduce budget deficits will create inflation and hurt the US economy.
23. Economic statistics. Score - 4.5
The US has a large infrastructure of economic statistics sources that help indicate our economic growth as well as influence policy changes. In general, analysts and lawmakers alike rely on data collection in order to make sound predictions and decisions about the future. For example, many businesses were eagerly awaiting the December 2015 jobs report to see if the federal reserve would raise interest rates for the first time in seven years, an action that would have an impact on domestic business.
While most people see data published by the Bureau of Economic Analysis, Census Bureau, and Department of Commerce to be accurate, some economists look down upon the misleading representation of certain statistics in order to promote political agendas. Jeffrey Dorfman, professor of Economics at the University of Georgia, claims that many statistics can be easily manipulated or presented in a way that doesn’t fully reflect the truth. When this data is skewed in such a way, it can be used to promote bad policies that undermine the US economy. While some argue that economic statistics can be misleading, it is everyone’s responsibility to report the information accurately.
24. Protection of public health and safety. Score - 4.8
The infant mortality rate for the US in 2016 was 0.5%. That was only slightly higher than the European Union and Japan which had 0.4% and 0.2% respectively. In comparison, the highest infant mortality rate in the world was Afghanistan at 11.2%. In 2015, the US had only 9,557 reported cases of tuberculous, one of the deadliest diseases in the world. Those reported cases represented only 3 cases per 100,000 persons. Out of those cases, about two thirds occurred in people not born in the US. Overall, tuberculous infections and deaths in the US have been steadily decreasing since 1992.
The US government takes steps to ensure the nation’s public safety. Institutions such as the Centers for Disease Control and the Food and Drug Administration both receive funding from the federal government. In August 2017, Congress passed a new law that expanded funding for the Food and Drug Administration that would allow drugs to get approved and reach the market quicker. Additionally, the Centers for Disease Control awarded over 4,400 grants that resulted in $6.6 billion going towards public health research in 2016. https://www.cdc.gov/tb/publications/factsheets/statistics/tbtrends.htm
25. High wage policies. Score - 3.3
Real wages in the US have not risen in decades. The average hourly wage for a non-management private-sector worker was $20.67 in 2014. After adjusting for inflation, this had roughly the same buying power as wages in 1979. The US has few policies in place that effectively raise the wages of average workers. In 2016, President Barack Obama ordered the annual salary threshold for overtime exemption to be raised from $23,660 to $47,476, a policy which is currently being appealed by President Trump’s Administration. Also free trade agreements force American workers to accept lower wages in order to compete with overseas jobs. If Americans make less, they will spend less at home and continue to buy less expensive foreign goods which does not promote domestic business growth.
While wages have essentially stayed flat, studies have suggested that about half of Americans are considered middle-class. For a single person, this would reflect an annual income of about $24,000 to $72,000. The US Census Bureau estimated that in 2016 about 12.7% of Americans lived below the poverty line, which reflects an annual income of less than $12,486 for a single worker under 65. This suggests that most Americans are able to purchase goods beyond basic necessities; however, in order for domestic growth to occur, wages for average Americans need to be marginally increasing as prices increase.
26. Environmental protection. Score - 2.1
Despite the amount of money being put towards environmental protection, pollution is still a major issue in America. A recent study led by Harvard professor, Francesca Dominici, has shown that the minimum standards for air pollution put forth by the Environmental Protection Agency are still too high and considered extremely harmful. The study estimates that 12,000 lives could be saved each year by reducing air pollution just a fraction lower than the current standards. Additionally, 12 people were killed as a result of contaminated water in Flint, MI after the city changed its water supply in 2014. The residents of Flint filed a class action lawsuit against the EPA claiming negligence on the part of the agency.
There are currently over thirty active laws that have been passed by Congress under the advisement of the EPA. It is the job of the EPA not only to write regulation that helps form these laws, but to also ensure compliance. The laws themselves cover everything from air pollution to the protection of endangered species. Enforcement of these laws can come in the form of civil or criminal lawsuits that can result in hefty fines or prison. In 2016, the EPA was responsible for over $50 billion in combined enforcement payments as well as 93 combined years of prison time sentenced to violators. Yet, business investment can be hindered in areas affected most by pollution.
27. Strong army. Score - 5.0
The US is ranked first in the world regarding how much it spends on military and defense. In 2016, US military spending was $611 billion. China was second in the world with an estimated $215 billion, just over a third of what the US spent. The US also ranks first for the amount of active aircrafts, air carriers, and submarines. In addition, the US currently has 1.3 billion active duty members, which is only third behind China and India respectively.
Despite being ranked so highly, military spending accounted for only 15% of the US budget in 2016. That’s the lowest it has ever been. The percentage of GDP in 2016 made up of military spending was about 3.29% while capital investment was 15.9%. The US is able to build one of the strongest armies in the world which greatly encourages business investment.
28. Foreign trade impact. Score - 4.2
The total dollar amount of US exports in 2016 was $2.2 trillion while the total amount of imports in the same year was $2.7 trillion. Together they amount to $4.9 trillion. That represented 26.5% of the 2016 GDP of $18.57 trillion. The top two US export categories in 2016 were Industrial Supplies including petroleum and Capital Goods excluding automotive. The top two US import categories were also Capital Goods excluding automotive followed closely by Consumer Goods excluding food and automotive.
The total percentage of foreign trade in relation to overall GDP has been steadily rising for the last forty years. The exception would be a 5% decrease between 2008 and 2009 with the economy being hit by a large recession. Shortly after, however, the US hit an all time high of 30.9% in 2011. The US could benefit from increasing foreign trade, particularly exports. However, our economy is not held back by the levels at which we currently operate especially since one of the largest products we import is Consumer Goods and not something essential like food or agriculture.
https://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1#reqid=9&step=3&isuri=1&903=133 Table 4.2.5. Exports and Imports of Goods and Services by Type of Product
29. Management of foreign currency budget. Score - 3.5
In 2016, the foreign trade deficit was over -$504 billion with US exports accounting for roughly $2.2 trillion and US imports totaling over $2.71 trillion. Given the total estimated GDP in 2016 was around $18.57 trillion, the foreign deficit accounts for -2.7% of GDP.
Since, 1960, the closest the US has ever been to a balance of zero in terms of foreign surplus or deficit was in 1969 with a surplus of $91 million which was only 0.009% of the 1969 GDP of $1.02 trillion. The furthest the US has been to a balance of zero was in 2006 with a total deficit of over -$761 billion which was still only -5.49% of the 2006 GDP of $13.85 trillion. While we would like our total to be closer to zero, a current imbalance of -2.7% is not reducing the supply of money too drastically.
30. Layers of collective action. Score - 3.2
The US government is broken up into the Federal and State levels. At the federal level, citizens are only able to elect very few positions, such as members of the Senate, Congress, and the President. At the State level, the majority of the public office positions are elected by the people who live in the state and specific communities. This creates many layers of collective actions for those individual districts and cities. More citizens are put into managerial roles of responsibility that can better prepare them for starting a business in addition to creating an emotional tie to their community which encourages them to remain in and improve their community.
Each state has the right to pass legislation that can create or eliminate term limits for locally elected officials. In many states and cities, certain elected officials have no limits on how long they can serve. In San Diego, California, board members of the Unified School District can serve indefinitely. In March 2017, citizens of San Diego were considering ballot measures to impose term limits for school board members, which, according to some, would guard against government corruption.
Government corruption can lead to inefficient use of resources, weakening economic growth, and increased crime. Such was the case in West Haven, CT between 2007 and 2012 where the director of the West Have Housing Authority accepted bribes from specific companies in exchange for government contracts. So while there appears to be many layers of collective action at the State level, the lack of uniform regulation regarding elections and term limits does not necessarily encourage healthy business growth.
31. Pro-business climate. Score 5.0
The US was founded on basic, yet powerful, concepts put forth in the Declaration of Independence such as man’s unalienable right to Life, Liberty, and the Pursuit of Happiness. Many people liken this statement to the American Dream, a concept which suggests that success, prosperity, and upward social mobility can be achieved through hard work and ability in a society with few barriers. The American Dream is an ethos adopted by our country in order to promote progress, forward thinking, and innovation as a result of individuals starting businesses to achieve personal wealth and comfort.
In 2017, Budweiser released an ad on national television that depicted Adolphus Busch, the cofounder of Anheuser-Busch, as a young German immigrant in America attempting to fulfill his dream of starting a brewery. The ad goes on to imply that hard work, determination, and ability led to the formation of what is now one of the world’s largest and most recognizable beer companies. The fact is the US has a pro-business climate that is supported not only by one of the most “American” of all brands, Budweiser, but also by the US government.
32. Government enterprises. Score: 4.1
Government subsidized businesses can be beneficial to the economy and the well being of citizens, provided the companies are not relying wholly on government funds to operate. If too much money is going towards keeping firms in business, it can create unfair advantages and destroy competition for private firms. Some industries, such as agriculture, do rely heavily on government subsidies, but are deemed necessary.
In the United States, the number of privately owned companies far exceeds the number of government owned enterprises. In 2016, the percentage of GDP that made up government spending was 17.7%, equating to roughly 3.28 trillion dollars. Out of that 3.28 trillion, only 1.8% of that was spent on subsidies; that’s only 61.8 billion dollars of total government spending going towards US businesses. The biggest portion of that money is housing subsidies paid out in the form of tenant assistance programs and home owner tax credits for mortgages, not on wholly owned government enterprises. Compare that to the 15.9% of GDP, about 3.12 trillion dollars, accounted for by private business investment in 2016 and it is clear that government enterprises do not pose a significant threat to private firms.
- https://bea.gov/iTable/iTable.cfm?reqid=9&step=1#reqid=9&step=3&isuri=1&903=111 Table 3.13 Subsidies, Table 1.1.5 Gross Domestic Product
33. International security agreements. Score: 5.0
The United States has agreements and treaties with several countries to ensure our safety at home. The Department of Homeland Security engages in international programs such as the Customs Trade Partnership Against Terrorism and Operation Global Shield. Both of these programs are designed to work closely with neighboring countries as well as others around the world to track and prevent potential threats. In addition, the US has maritime bilateral agreements with over 40 countries. These agreements increase the operational reach of US assets while also providing support to other nations.
All of these security agreements are backed up by significant government spending on military and defense. In 2012, the US ranked 9th in the world for highest percentage of GDP dedicated to military spending, around 4.35%. In 2016, the percentage dropped to roughly 3.29%, which still puts the US in the top 20.
34. Protection of domestic enterprises from government mandated costs. Score: 2.3
Surveys have shown that over 70% of small business owners characterized government regulation as a serious problem. A small firm may find it difficult to navigate the federal tax code which leads them to hire an outside service. Also, businesses must comply with recent legislation such as the Affordable Care Act and the Fair Minimum Wage Act, both of which raise costs to the firm. In addition, some businesses are forced to acquire several costly licenses in order to operate.
Rising business costs as a result of government regulation can force firms to raise their prices which hinders their competitive edge against less expensive imports. While higher tariffs placed on imports can make domestic products more attractive to consumers, the United States has free trade agreements with 20 countries that ensures little to no tariffs placed on imports from those countries. Currently, approximately 96% of U.S merchandise imports are industrial, nearly half of which enter the country duty-free. This gives firms incentive to produce abroad rather than domestically. The result being that US imports have exceeded US exports since 1975.
Four studies of the economic policies of the United States of America are presented here. The second study presented is by native born United States student Emma Hogan. Specialist Emma Hogan's analysis is presented immediately below. To read further studies by other native born Specialists, scroll through this page. The ratings herein are based on the following rating scale:
5.0 Perfect Facilitation of Wealth Creation
4.0 Midway between Perfect and Neutral
3.0 Neutral Effect on Wealth Creation
2.0 Midway between Neutral and Obstructionist
1.0 Perfectly Obstructionist to Wealth Creation
[Rating scale copyright Mike P. McKeever, 2018. Used herein with permission]
RATING SUMMARY - EMMA HOGAN POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE 1 5.0 15.0 15.0 100 % 2 4.8 14.4 15.0 96 3 2.9 8.7 15.0 58 4 5.0 15.0 15.0 100 5 4.7 14.1 15.0 94 6 5.0 15.0 15.0 100 7 4.8 14.4 15.0 96 8 3.8 11.4 15.0 76 9 2.3 6.9 15.0 46 10 4.6 13.8 15.0 92 11 3.0 9.0 15.0 60 12 5.0 10.0 10.0 100 13 3.5 7.0 10.0 70 14 5.0 10.0 10.0 100 15 1.6 3.2 10.0 32 16 1.3 2.6 10.0 26 17 4.7 9.4 10.0 94 18 2.0 4.0 10.0 40 19 1.6 3.2 10.0 32 20 3.8 7.6 10.0 76 21 1.2 2.4 10.0 24 22 0.6 1.2 10.0 12 23 4.4 8.8 10.0 88 24 3.5 7.0 10.0 70 25 2.8 5.6 10.0 56 26 3.6 7.2 10.0 72 27 3.3 6.6 10.0 66 28 4.0 8.0 10.0 80 29 3.0 3.0 5.0 60 30 4.0 4.0 5.0 80 31 4.5 4.5 5.0 90 32 3.0 3.0 5.0 60 33 4.5 4.5 5.0 90 34 3.5 3.5 5.0 70 TOTAL 120.3 264.0 365.0 72.3% ===== ====== ===== =====
INDIVIDUAL POLICIES - EMMA HOGAN
1. Freedom from internal control 5.0
Freedom to move about the US is sanctioned under the Privileges and Immunities Clause of the Constitution which states, "The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States.” This clause allows citizens to freely travel and conduct business across all state borders within the country. While this clause entitles citizens freedom to move about state borders there is the Extradition Clause of the Constitution which makes sure domestic activity is legal and regulated. It authorizes the extradition of a criminal back to the state where he or she has committed a crime. This clause holds criminals accountable and prevents them from moving to a different state to avoid punishment. These two clauses generate a fair business environment nationally.
2.Freedom of speech 4.8
The freedom of speech clause in the First Amendment limits government restriction or censorship. It is commonly misunderstood that the First Amendment allows citizens to say whatever they may want but this is not actually the case. There are a number of laws regulating what is and is not allowed to be said, especially in business. For example, consumer protection laws, trademark and copyright laws and employment discrimination laws control specific speech freedoms. Freedoms of speech and press without government infringement are good for businesses because individuals are free to generate new ideas. By allowing for nonpartisan or impartial reporting and press, freedom of speech helps level the playing field in business by ensuring fairness and honesty. Countries that do not protect freedom of speech often have more corruption and illegal activities. The First Amendment and the subsequent modifications are beneficial to American citizens, businesses and democracy.
3. Effective, fair police force 2.9
According to a 2016 Gallup study, the police force in the United States ranks 3rd of 18 most trustworthy institutions following military and small businesses, with 57% of the population having trust. When looked at more closely it is clear to see that the numbers among trusting minorities is incredibly low at 30% of African-Americans and that the overall trusting population is primarily made up of White Americans. This is largely in part due to the long lived trend of police brutality and unfair treatment of people of color in America. 69% of African-Americans and 54% of Latinos believe the police unfairly target minorities whereas less than 29% of White people feel that way. There have been a number of protests such as the Black Lives Matter movement to try to alter the way African-American people are treated by the police force but little change has been made. Adverse stances regarding the police force contributes significantly to the national division amongst racial groups, political parties, and age groups. This widening division obstructs a shared responsibility for society’s future which will ultimately hurt the economy.
4. Private property 5.0
Private property laws and titles are recognized nationally as they are defined in the constitution under the 4th and 5th amendments.The 5th amendment restricts eminent domain by requiring that "just compensation" be paid if private property is taken for public use. In conjunction with the 4th amendment, which protects people’s right to privacy and freedom from unreasonable intrusions by the government, people's properties are protected from all non owners and the government. The concept of private property in America refers more specifically to the rights owners have to exclusively use said property rather than the actual physicality of the property. The documented rights to private properties have been capitalized by banks and insurance companies such as the chain of title sequences on properties. Chain of title is the record of previous property owners linked to current owners. In general owners are free to use their property; real, personal and intellectual, however they want and can sue people if they steal said property which is conducive to the capitalistic system we abide by.
5. Commercial banks 4.7
Banking in the United States is regulated by both the federal and state governments. The five largest banks in the United States are JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs. In 2011, these banks' assets were equal to 56 percent of the U.S. economy. The Federal Deposit Insurance Corporation is a government agency that provides deposit insurance for all of its 5,844 member banks. They guarantee the safety of deposits, monitor certain financial institutions for safety and soundness and manage banks that fail. The FDIC provides stable and safe banking conditions conducive to businesses and economic balance.
6.Communication systems 5.0
The US economy strives because of the pervasive communication system throughout the country. Access to all forms of communication is readily provided for all citizens. The Federal Communications Commission is an independent government agency that regulates the radio, television, and phone industries. They monitor all communications within these industries such as wire, satellite and cable communications in the US. Internet service providers administer internet to all consumers following the principles of net neutrality which allows for fair access to new ideas and business opportunities.
All major US markets and population centers are easily accessible with 15,000 airports, 164,000 miles of highways, 700 railroads, 175 ports and a vast amount of public transportation systems nationwide. The vast accessibility via transportation for local citizens as well as for international business endeavors contributes largely to the success of the economy.
Education in the US is provided through public, private and home schools. The vast majority of children are enrolled in school from 6-18 years old with 93% of Americans having a high school diploma. The US ranks 17th in overall educational performance when compared with 34 countries. American students perform specifically below average in math. Despite performing below average compared to other countries, the US ranks fifth in spending per student at $115,000. After high school there is a significant drop in students attending college or university because it is brutally expensive. Having an advanced education has become a requirement for the workforce though, which has resulted in a 1.3 trillion dollar student loan debt. America has relatively low academic performance overall but excels in higher education institutions with 6 out of 10 of the top world renowned universities in the US. Over a million international students come to the US for college every year.
9. Social Mobility 2.3
The national ethos of the “American Dream” has significantly lost its value and attainability in the US. America was built on this commonly held ideal that with hard work and dedication one can achieve success and wealth regardless of socioeconomic background. This dream became increasingly harder to achieve as the income inequality gap became larger and larger. The top 0.1 % of wealthiest americans are worth more than the entire rest of the population. The top percentile continues to get richer while the bottom percentile gets poorer.
The percentage of individuals moving up in income brackets has decreased significantly in the last decade. The large disparity is fueled by a system that is rigged in favor of the rich. It is now a requirement for the job market to have an education and college degree. Access to such education is a privilege only wealthy families and a small percentage of lower class students can afford. So to become educated you have to come from an educated family and if you don't the chances of you achieving the same success is almost impossible. Individuals from deprived backgrounds who make low wages during their first jobs will not likely make much more throughout their lives.
The elite classes receive huge tax breaks because of the theory that with that extra money they will invest it into the economy and it will trickle down. This theory does not sufficiently help the rest of the population because the money rarely trickles down far enough. Instead the money is invested to maintain a plutocratic non-mobile system.
10. Freedom from outside control 4.6
According to the constitution all US citizens, individuals within the US, companies operating in the US, or companies owned by US citizens are subject to US law. There is no presence of foreign control in the US. There is a current theme of foreign influence in politics but still virtually no legal control.
11. Protection of Domestic Enterprises 3.0
The United states has a large trade deficit at $196.8 billion in exports and $240.3 billion in imports as of september 2017. This is due to a number of reasons, but mainly can be attributed to the US trend of purchasing more than what it's creating. This creates a gap in goods available which the US fills by importing more. The US has free trade agreements with 20 countries which allows for non-taxed entry of goods into the US. One half of all industrial goods enter duty free. US enterprises often outsource business manufacturing to other countries because it is cheaper and less regulated. This hurts the economy in the US by not creating domestic jobs whilst also not really helping foreign economies either because the labor abroad is cheap and unprotected. The US is still one of the wealthiest economies in the world despite the trade deficit and continues to have a surplus of money to spend.
12. Foreign currency transactions 5.0
All businesses in the US require the US dollar for transactions. All foreign currencies must be exchanged via the posted exchange rate prior to transactions. Banks and currency exchange agencies can exchange foreign currencies to the dollar for a small charge. Using only the national currency for conducting business is a stable and effective way to create wealth because competing currencies slows down commerce.
13.Border control 3.5
Having a safe and secure border is important for our nation's economy and wealth creation. Strict regulations and safety measures along the border are imperative to preventing the entry of national security threats from entering. Under Obama we had a high of 21,730 border patrol personnel and spent about $18 billion dollars a year on immigration enforcement. Trumps administration plans to add to that large budget by building a wall along the southern US border that is estimated to cost upwards of $70 billion dollars.
So while it is true that border security is important and should be maintained, our national approach and outlook on border control focuses on all the wrong reasons and is subsequently just a large waste of resources and money. US policy since the 1980’s treats all border incursions as equal threats instead of focusing on actual homeland threats such as drug cartels, human traffickers or potential terrorists. A majority of the migrants crossing the border are just looking for temporary work and in the grand scheme pose no threat to our economy. Building a wall and adding more border personnel does not hinder actual criminals from exploiting the loopholes in the existing system. By establishing a system to legitimize entry for non-threatening temporary migrant workers we could free up border security so they could focus on the illegal industries that are currently thriving across the borders.
14. Currency 5.0
The United States solely uses the US Dollar. The Dollar is marked by the "$" sign and is printed by the US Bureau of Engraving and Printing. The BEP is controlled by the US Treasury which dictates how much money to print. The Federal Reserve has control of the money supply once it is printed through its power to create credit with interest rates and reserve requirements. The US dollar is arguably the strongest currency in the world because of its global power and strength to maintain value.
15. Cultural, language homogeneity 1.6
While achieving a complete cultural homogeneity is impossible and finding a happy medium point is unlikely, Americans actively seek to have neither. Racism and ethnic conflicts have always been present and celebrated in United States history beginning with the genocide of Native Americans. More recently though the public discrimination against minority groups has dramatically escalated. Largely in part due to Trumps unapologetic rhetoric that targets minorities and his support for white supremacists. Anti-black, anti-muslim, anti-hispanic and anti-semitic hate crimes have seen significant spikes in all major US cities. White supremacist and neo-nazi groups such as the Ku Klux Klan are active in the streets and have been holding dangerous rallies in cities across the country such as Charlottesville, Virginia and Murfreesboro, Tennessee. It is becoming increasingly dangerous for muslim and black americans as bigotry is normalized and encouraged granting this policy a 1.6.
16. Political effectiveness 1.3
Political effectiveness is measured by how governments recognize and solve problems. Our government is incredibly ineffective because of the nonsense and chaos going on in politics. Everything and everyone is distracted by trivial problems so much that nothing is being accomplished. It seems as if most political decisions are made specifically to spite the opposing party rather than to make improvements. American citizens are suffering because of this impotent government climate. To name a few problems the government has failed to improve or even try to help throughout the country; Flint michigan has been without clean water for 3 years, there have been 308 mass shootings this year so far, thousands of people are dying from opioid addictions, Puerto Rico has been without running water and power for 2 months and hundreds of thousands of displaced Americans have yet to be helped. Rather than taking action to combat any of these problems the Trump administration has instead tried to take away healthcare from millions, rescinded from Paris Agreement, and situated us on the brink of a nuclear war with North Korea granting this policy a 1.3 score.
17. Institutional stability 4.7
The United States government, courts, schools, law enforcement and businesses have experienced little ratifications since they were originally designed by the constitution in 1787. This institutional stability has allowed for american business and capitalistic system to become such a prominent world power. The civil war in the 1860’s was the only major disruption to overall stability. The economy has not been entirely stable with numerous recessions and fluctuations, but the system of laws that mandates the government, courts, schools, law enforcement and businesses has not been significantly changed granting this policy a 4.7
18. Honest government 2.0
While on a relative scale America ranks 18th on the list of corrupt countries, 1 being least corrupt, America is not that corrupt. However the difference between America and the most corrupt country at 176th on the list Somalia, is that America is far more powerful and globally influential. Our corruption and dishonest government affects the world in more drastic ways so it it still gets a low score. America is riddled with corruption at historically high rates. American politicians represent the 1% and the 1% only. There is a clear disregard for the well being of the American people and for the rest of the world population, which is becoming clearer with every decision made by the Trump administration. Our continuing efforts to only support big industries, allow immense amounts of bribery, use government positions for profit, have no apparent checks and balances in place, and deny necessary action on climate change grants the US with a low score of 2.0
19. Common laws 1.6
On paper the law system of the US is pristine. According to the 14th Amendment to the constitution, all people within the jurisdiction of the United States government are entitled to “equal protection of the laws” as well as more state-binding rights to due process. However the reality is that the whole justice system is racist and plutocratic. Systematic racism and discrimination is evident throughout all areas of American history and government. Minorities, especially those of low income, do not have the same rights and privileges that white individuals do. It is evident that the whole justice system is rigged against people of color as they are disproportionately incarcerated, policed, and sentenced to death at significantly higher rates than their white counterparts. Beginning with a higher chance of being arrested, to a probable longer or harsher sentence, to the disenfranchisement and disparity in wage trajectory that comes with felony chargers. 1 in every 15 African American men and 1 in every 36 Hispanic men are incarcerated in comparison to 1 in every 106 white men. The system is plutocratic in many ways but can be seen especially in legal representation for court cases. Minorities of low income usually cannot afford private representation so they are appointed lawyers by the court. These lawyers are usually overloaded and do not have the time or resources to help defendants thoroughly so they are at a disadvantage compared to wealthy individuals who can afford private representation.
20. Central bank 3.8
The Central bank system of the US, the Federal Reserve System, was created by congress in 1913 with the Federal Reserve Act. The Fed's primary purpose was to ensure and protect the economy against bank panics and to serve as a safe, independent from government control, and stable monetary system. During the financial crisis in 2008 the Federal Reserve issued numerous bailouts in attempt to save the economy. An audit of the Reserve found that many of these bailouts were allocated to institutions overseas, with over $16 trillion dollars given to banks and businesses internationally during and after the crisis. This raised questions about the objectives of the Fed and also illuminated some weaknesses in our central banking system.
21. Domestic budget management 1.2
For the fiscal year 2017 the treasury department reported that the budget deficit was $666 billion dollars, with $3.3 trillion in revenue and $4 trillion in spending. By continuing and increasing the budget deficit, $800 billion of which is spent on defense and only $120 billion on education, the US government illuminates its catering to special interests. The domestic budget deficit of the US amounts to greater than 103% of its GDP granting this policy a poor 1.2 score.
22. Government debt 0.6
Today the United States debt-to-GDP ratio is 106.5%, with a total national debt upwards of 20 trillion dollars. It is expected to climb to 24.19 trillion at the end of the 2018 fiscal year. The current amount of federal debt averages out to about $62,652 per person in the US. The only way to spark improvement of this debt crisis would be for policy makers to cut spending and enacting long-term reforms to major government programs. To the exact contrary President Donald Trump's plan to reduce national debt is projected to increase it by $5.3 trillion dollars.
23. Economic statistics 4.4
With today's technological advancements we can obtain information instantaneously. A number of credible sources provide us with economic statistics that keep us informed and smart about the current economic climate. The US government has many departments set up to gather, analyze, and provide the public with accurate and trustworthy statistics. Such as the Department of Commerce that heads the Bureau of Economic analysis and the Department of Treasury which is responsible for releasing economic data. Access to true facts and statistics is very beneficial for investors and entrepreneurs by allowing them to stay up to date and in tune with the economy. The new trend of “fake news” that started with the 2016 presidential election substantially affected the election and the repercussions that followed. To obtain credible information now more work and research is required but it is still possible and available which grants this policy a 4.4 score.
24. Protection of public health and safety 3.5
The United States spends a greater percentage of its GDP on Healthcare than the next 12 high income countries do, at 17.1%. This percentage of GDP spent on health is 50% more of the economy devoted to healthcare than the next 12 countries. The US spends more on healthcare than other countries because it is simply more expensive to obtain and we do not have a universal healthcare program. Furthermore, even with the high amount of money per capita spent on health, the US overall falls short in life expectancy, at 78.8 years on average, and relatively high in infant mortality rates at around 5.8 deaths per 1000 births. The US obesity rate is 15% higher than the next highest country at 57.6% of the population. Americans on average also consume more prescription drugs, at 2.2 per adult and suffer more chronic diseases at 68% of adults having at least 2 conditions.
25. High wage policies 2.8
The United states has a national minimum wage of $7.25, which while this is substantially higher than those of most of the world, is still not high enough to keep many citizens afloat. For example 43.1 million Americans lived in poverty in 2015, 1.0% higher than the amount of citizens during our most recent recession in 2008 living in poverty. Raising the national minimum wage would boost productivity and the economy, lessen the immense pay gap, spawn savings in government help programs, and foster an overall more efficient and fair economy. Most of the problems with our wage policies are because of our regulations that favor employers over employees.
26. Environmental protection 3.6
In a general historic sense, with disregard to our current regimes anti-climate and anti-environmental agenda, environmental protection laws are incredibly important to the well being of our country and planet. The founding of the Environmental Protection Agency in the 1970s brought much needed regulations on water, air, climate, pesticides and hazardous wastes. The EPA and government administrations have made copious amounts of progress since then and have implemented a great deal of regulations that protect us and the environment. The Clean Air Act, Clean Water Act, Clean Power Plan and Superfund act are just a few examples of progressive and effective regulations put forward by the EPA. The EPA is indispensable and should, if any change is to be made, be stronger. As a powerhouse country it is our ethical responsibility to do our part and more. One of the most important attributes of the EPA is that it holds corporations accountable for their environmental footprint and ensures fair use of our limited natural resources. I disregard the current disastrous administration because they intend to completely erase any progress the EPA and past politicians have made toward a better future. Because of our ability to do more for the world, and the potential harm projected by Trump’s administration, i give this policy a 3.6.
27. Strong army 3.3
Our current budget for military and defense is higher than all of the seven next highest military spending countries combined. The amount of money, resources, time and lives wasted by the United States government in the name of international safety and foreign affairs is unprecedented in any other country. In terms of GDP our percentage of military spending is relatively low, at around 3%, but this still equates to around 600 billion dollars annually. The military budget is non-productive and drains resources from beneficial uses. Instead of allocating money to fund much needed education, basic research, infrastructure or growth of human capital we are just immensely contributing to our national debt. Our strong army does not contribute to the economy or promote job creation, however because we are a powerful nation and are not yet at risk of becoming a warzone, potential businesses owners are not hindered because of it either, granting this policy a fairly neutral score of 3.3.
28. Foreign trade impact 4.0
Foreign trade is a huge part of the United States economy. In 2015 the total sum of exports and imports of goods and services accounted for 28% of our GDP, which is a little less than one-third of the total GDP. This is an ample percentage of foreign trade to retain a balanced self-sufficient and diverse economy.
29. Management of foreign currency budget 3.0
Being that the United states has the world's largest economy and the strongest currency, more money comes into the United States than goes out. This surplus of investment adds to our trade deficit, even though the extra money is positive for our economy. Americans have more ability to buy goods than other countries that might be hurt by a trade deficit. The trade deficit has essentially nothing to do with trade policy. Industrial production in the United States has climbed during a time of historically large trade deficits. Many industries are booming and there is room to enter the market despite the trade deficit. So because the trade deficit does not have a considerable impact on the economy here in the U.S., the score is a neutral 3.0.
30. Layers of collective action: 4.0
In contrast to a dictatorial government where all of the political and economic decisions are made by a sole perpetrator, a democratic government allows for, and strives because of, a wide array of collective enterprises and actions. In collective action problems, such as voting in mass elections or organizing social protests, group members gain when everyone cooperates in supplying the public good. Layers of collective action in a geographical sense are indispensable here in the United States. In smaller countries it is easier to maintain efficient control but because the US is huge in both size and population, collective action allows for a productive delegation of power between federal, state and local governments.
31. Pro business climate: 4.5
Pro business by definition favors and supports Americans who are looking to open a business. Our capitalistic economic system is predicated on a pro business climate. The basic guidelines of capitalism are orchestrated to enhance a pro business environment that is conducive to business and economic growth. The idea of the “invisible hand of competition,” for example, illustrates competition and a pro business climate as cardinal market forces. States can also implement tax reduction measures, regulations, incentives, or investments in infrastructure to create more of a pro business environment.
32. Government enterprises: 3.0
The United States runs on a mixed market economy and because of this there is a lot of overlapping between the private and public sectors. Big businesses make up the foundation of our economy and heavily invest in government entities to ensure that they are allowed to continue business as usual. This goes the other way around via subsidy programs. Big business dominates federal subsidy spending and receives two-thirds of the $68 billion dollar budget in business grants and special tax credits awarded by the federal government. Big businesses do have a lot of influence in the economy and their economic status is important to upkeep. Subsidy programs can be detrimental in maintaining a stable economy and must be used and managed correctly. If they are not handled wisely, such as excessive bailouts, the government ends up adopting the debt and wealth is destroyed. A country with an extreme budget deficit and immense debt is not conducive to a successful economy.
33. International security agreements: 4.5
The US is in alliance with as many as 60 countries, mainly including those in the North Atlantic Treaty Organization. International alliances induce peaceful and stable trade networks. Countries that trade with their allies are less likely to be involved in wars with them. Peaceful trading and international relations help boost the economy, which creates a nice platform to successfully open a business. The economy is dramatically affected during wartime so international security agreements help avoid any huge disruptions to economic stability. However, if the government was to dedicate even a portion of the 600 billion dollars annually spent in the interest of foreign affairs or some of the time spent making these international security agreements to help further boost the economy and serve taxpayers more directly, opening a business would be substantially easier and that's why I lower this policy from a 5.0 to a 4.5.
34. Protection of domestic enterprises from government mandated costs: 3.5
While there is a plethora of arguments validating the benefits of protecting domestic enterprises from government mandated costs, such as making the competition with foreign enterprises more equitable or preventing domestic companies from turning to offshoring, government mandates are implemented to better society and are incredibly important to the general welfare of a country. It is true that small businesses in the United States are affected more by mandated costs than larger corporations and this does deter existing or potential businesses from operating or opening. However, it is also true that without these regulations, such as the Occupational Safety and Health Administration for example, both small and large enterprises would be worse off. Not paying mandates would be a way to cut corners but business owners would ultimately be more liable and end up paying the same amount or more money trying to fix whatever goes wrong. When looking at countries that do not enforce safety, wage or operating standards through regulations it is clear to see that they are crucial even if they dissuade some entrepreneurs.
Four studies of the economic policies of the United States of America are presented here. The third study presented is by native born United States student Liam Azulay. Specialist Liam Azulay's analysis is presented immediately below. To read further studies by other native born Specialists, scroll through this page. The ratings herein are based on the following rating scale:
5.0 Perfect Facilitation of Wealth Creation
4.0 Midway between Perfect and Neutral
3.0 Neutral Effect on Wealth Creation
2.0 Midway between Neutral and Obstructionist
1.0 Perfectly Obstructionist to Wealth Creation
[Rating scale copyright Mike P. McKeever, 2018. Used herein with permission]
RATING SUMMARY - LIAM AZULAY POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE 1 4.7 14.1 15.0 94 % 2 4.8 14.4 15.0 96 3 2.5 7.5 15.0 50 4 4.0 12.0 15.0 80 5 4.0 12.0 15.0 80 6 4.5 13.5 15.0 90 7 4.2 12.6 15.0 84 8 2.5 7.5 15.0 50 9 2.5 7.5 15.0 50 10 5.0 15.0 15.0 100 11 2.0 6.0 15.0 40 12 4.5 9.0 10.0 90 13 4.0 8.0 10.0 80 14 5.0 10.0 10.0 100 15 4.0 8.0 10.0 80 16 3.0 6.0 10.0 60 17 4.5 9.0 10.0 90 18 2.5 5.0 10.0 50 19 3.0 6.0 10.0 60 20 3.0 6.0 10.0 60 21 2.5 5.0 10.0 50 22 1.5 3.0 10.0 30 23 4.0 8.0 10.0 80 24 3.7 7.4 10.0 74 25 3.0 6.0 10.0 60 26 3.0 6.0 10.0 60 27 5.0 10.0 10.0 100 28 4.2 8.4 10.0 84 29 2.5 2.5 5.0 50 30 4.5 4.5 5.0 90 31 4.7 4.7 5.0 94 32 3.0 3.0 5.0 60 33 4.5 4.5 5.0 90 34 2.6 2.6 5.0 52 TOTAL 122.9 264.7 365.0 72.5% ===== ====== ===== =====
INDIVIDUAL POLICIES - LIAM AZULAY
1. Freedom from internal control- 4.7
Within america, entrepreneurs are free to do as they please with their business as long as their business is legal, and contains the correct permits. A business owner can move around worry free as long as they don’t break any laws in doing so.
In the United States of America, citizens have the freedom to create any business or enterprise they wish, so long as it adheres to the laws and regulations of the government. These laws are set in place solely for the protection of the people and preservation of justice. For example my father owns a restaurant and wants to expand the alcoholic diversity of the bar. In order to do so, he would need a liquor license that allows for more than just beer and wine. If he were to just begin selling hard alcoholic products without the proper permits then the local government would crack down on it. That being said, to build a business legally means that there are quite a bit of federal and state licenses and permits that one must obtain. These collectively can be very expensive and can make it difficult to start an enterprise. Therefore, the spectrum of individuals who have the ability (capital) to build something that follows the proper standards is skewed. While poor people have just as much of a right to start their own business, it is a much more arduous path.
2. Freedom of Speech - 4.8
The first amendment of the US constitution grants freedom of speech, religion, and peaceful protest. Americans may enjoy more freedom of speech than other nations, but there are interpretations to the first amendment that can stifle wealth creation as well as a few exceptions to the amendment which promote it.
The right to peaceful protest is effective in giving a voice to the population, but protests and demonstrations often shut down public transportation, highways, and the streets of cities financial centers. Hate speech is also protected that spreads racism, sexism, and heterosexism which blocks many workers from the workforce, students from schools, and consumers from markets. One exception to the first amendment in the US that promotes economic growth is the prevention of plagiarism of copyrighted material and the legislative protection of trade secrets. These protections defend american businesses and promote growth.
3. Effective, fair police force- 2.5
Police in The United States are becoming a topic of debate among main stream media. Main stream media creates controversy in order to draw viewership. One topic that gets viewers is police brutality. The number of arrest related deaths and misconduct has stayed relatively the same over the years, yet, due to the media, seem to be more prevalent. Due to technology, and the increase in information available, citizens understand the manner in which the police conduct themselves. Due to the tight bond and responsibility police officers share they often cover up each others flaws. This negatively impacts the freedoms of citizens, as well as the relationship citizens have with the police. Police generally are effective and fair, but instances in which they are not are often covered up, which can lead to more abuse of power in the future.
The United States touts the highest incarceration rate in the world. Over two million american citizens are currently behind bars and one in five are incarcerated for nonviolent drug offenses. The percentage of blacks in incarceration is more than three times higher than the percentage of Black in the general population while the percentage of Whites in incarceration is thirty nine percent less than the percentage of Whites in the general population. Mass incarceration costs the taxpayers and denies millions of Americans the opportunity to contribute to the economy.
4. Private property 4.0
In America we have the constitution which are the absolute laws of our country. The fourth amendment states “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated...” meaning that all personal property and your person is protected from search unless a warrant is presented with permission to do so, or one would have probable cause. If one wanted to protect an idea, then they could protect their work from being stolen with a trademark, copyright, or a patent. This protects from others copying their products, reselling, or creating one from scratch.
American Capitalism succeeds because all property is connected to the economy via the documentation. This allows property to be used as collateral for credit. In turn credit is used to fund new businesses, which stimulate the economy. If not for collateral the American system would not lend the money, which is the foundation for growth within the American economy. When some property, such as homes or cars, are bought or sold they must be registered. This current system is faulty, and, as a result, it is often hard to tell who owns certain items unless there is proof of sale or payment attached to said item.
5. Commercial Banks: 4.0
In March, 2017 commercial banks in the United States loaned over $2 trillion in commercial and industrial loans. In November of 2016 commercial banks loaned a record high $2.1 trillion in commercial and industrial loans. In the fourth quarter of 2015 commercial banks loaned almost 75% of the total value of loans. The top five banks in America, JP Morgan; Chase; Wells Fargo; Citigroup; and Bank of America, have all been lending at extraordinary rates despite regulations that raise lending standards. These standards stop banks from lending to more risky, young companies. As a result small businesses can still find it difficult to find willing lenders. The money banks have loaned has created jobs and boosted the United State economy.
6. Communication systems – 4.5
Communication facilities are plentiful in the United States, with 382 million cell phones, 121 million telephones, and 118.4 million televisions across the country, as well as 74.6% percent of the population having internet access. Internet access is especially beneficial, as it acts as a method of communication which can also provide access to other forms of communication, such as online publications of newspapers and magazines. Having plentiful methods of communication is very valuable to the economic growth of a country, as it allows for the increased exchanging of information and ideas.
Around 40% of the world’s population has internet access. In the United States this figure is 88.5%. 64% of Americans own smartphones, up from 35% in 2011, and 7% of those with smartphones have no other source of internet connection. The booming smartphone, internet and social media world markets are dominated by American companies like Google, Apple, and Facebook who benefit from the growth of the industry. Smartphones make phone calls and access the internet via service providers using communication satellites. There are currently 324 US communications satellites in Earth’s orbit.
7. Transportation - 4.2
In 2010, the U.S. had over 15,000 airports, out of 43,982 in the world. Additionally, in 2014 over 10.8 billion trips had been taken on U.S. public transportation. With the high availability of transportation, commercial activity is greatly improved.
The main mode of transportation in the US is the automobile. There are 218 million licensed drivers in the country about two thirds of the population that together drive an average of over a million miles on highways each day. Public transportation in the US is subpar in comparison to its European counterparts. In the US 80% of trips are taken by car compared to less than half in Europe. The US is also behind many other developed countries in Asia and Europe that have high-speed rail systems. Plans to build high-speed rail in California are underway but construction is years away and funding is not yet secure.
8. Education – 2.5
In a study of 34 of the world's top countries, the United States is ranked at 14th in reading, 25th in math, and 17th in science. For a country with so much authority, our education system is failing. In 2012 only about 39 percent of people in the U.S. were expected to graduate college. The government also spends its money elsewhere and thus the funding for education has decreased by almost five percent since 2009.
All of these statistics demonstrate the the United States education system is incredibly poor compared to other industrialized countries. In Fall 2016 there were over 50 million students enrolled in pre-kindergarten through 12th grade, and 20.5 million students enrolled in colleges. This means students make up more than 20% of the United States 321,000 citizens. In 2011 the United States had 91.88% of school aged citizens enrolled in school. This ranks the United States at 108th in this category. Other developed nation such Japan, Canada, Iran, and the Netherlands all have over 99.65%. This shows the low education standards in the United States whilst paired with the extremely expensive price of University in this country leaving most unable to attend or in massive amounts of debt.
9. Social Mobility – 2.5
Upward social mobility is more difficult in the US than in other wealthy countries. One of the reasons for this is because the difference between the upper class and lower class income in the country is so large. Income inequality has been growing in the past decades and continues to climb. A study published in 2008 showed that economic mobility in the U.S. increased from 1950 to 1980, but has declined sharply since 1980. A 2013 Brookings Institution study found income inequality was increasing and becoming more permanent, sharply reducing social mobility.
US social mobility has either remained unchanged or decreased since the 1970sA study conducted by the Pew Charitable Trusts found that the bottom quintile is 57% likely to experience upward mobility and only 7% to experience downward mobility. This lack of mobility will ultimately limit wealth creation as it has for years in the USA.
10. Freedom from outside control – 5.0
Everyone currently within the U.S. is subject to U.S. laws, including those who arrive on a visa or green card. No other country has any control over the United States or its citizens currently residing within, making it completely independent. This independence is beneficial to the economic prosperity of the United States, as it provides a degree of stability and efficiency to businesses and consumers by requiring them to account only for U.S. laws.
Citizens within the US can live worry free due to us having the strongest military in the world. If one was to visit another country and there from the US they would also not have to worry too much because of our vast foreign relation agreements.
11. Protection of Domestic Enterprises 2.0
The United States is one of the richest countries in the world, ranked at #13 when measuring by GDP per capita according to Business Insider. Currently, the U.S. has free trade agreements with over 20 countries. In March of 2017, the goods and services deficit was $43.7 billion, with $191 billion gained in exports and $234.7 billion lost in imports. What this data suggests is that U.S. industries are unable to compete with foreign industries. Because of these free trade agreements, it becomes considerably cheaper for U.S. businesses to outsource their labor to countries with lower minimum wages and work safety regulations, leaving many Americans out of a job. Many though, including the newly elected president believe that American unemployment is the result of jobs moving overseas producing cheap low-wage imports. The 48.5 billion trade deficit gives some validity to this claim.
Corporate taxes in the US are higher than all of the country's’ trading partners. This discourages investment in the country and encourages US corporations to operate outside the border where they can write off their overseas income on their taxes.
12. Foreign currency transactions: 4.5
The United States Dollar is the standard currency used throughout the country. It is the only legal tender accepted for debts, public charges, taxes, and dues. Foreign currency must be exchanged for USD before purchases can be made in the United States
There are no businesses in the US that accept any currency but the US dollar. Most banks in the country will exchange foreign currency at a posted exchange rate. If a purchase is made with a bank or credit card that linked to a foreign account the currency is exchanged into US dollars automatically and vice-versa. Because transactions within the U.S. are conducted using a single, official currency, government fiscal and monetary policies are effective. Therefore, this policy receives a high score.
13. Border control: 4.0
According to a publication in 2012 by the Department of Homeland Security, it is estimated that 11.4 million illegal immigrants were residing in the United States, out of a population of 314.1 million. Of these 11.4 million, over 50% were estimated to have originated from Mexico, which is right next to the United States. This strongly suggests that border control between the U.S. and Mexico is weak. This also does not account for how many illegal immigrants originating from other countries have made use of the weak border control between Mexico and the U.S
Over the past 24 year the number of US border patrol agents has increased 500%. The US currently spends 1.5 billion a year securing its borders and ports. The current president campaigned on a pledge to build a massive wall across the southern border, though there are as of now no plans in place to do so. The government is divided among those who wish to find and deport undocumented immigrants and those who want to grant them a path to citizenship.
14. Currency: 5.0
The United States Dollar (USD) is the official currency of the United States, and is much preferred over alternative, foreign currencies. It is the only government-approved currency issued in the country. The nationwide usage of this single currency simplifies and streamlines transactions, allowing commerce to be conducted efficiently.
Today the US dollar is the closest thing to a world currency. Most international transaction is carried out in dollars. 65% of all US bills are in use outside of the country. International banks have a large need for US dollars on-hand.
15. Cultural, language homogeneity: 4.0
The United States is a diverse, cultural melting pot. According to the Census Bureau in 2015 77% of the population was white, 13% was black, 17% was Hispanic, and 5.6% was Asian. While the population is primarily white there are a decent portion of other races. Nearly all of the citizens speak English. The United States is diverse nation unified through a strong sense of nationalism. Some minority groups such as black lives matter have started to speak out, but these groups are a vocal minority. Despite this the United States is a culturally homogeneous.
In terms of ethnic and cultural diversity, the United States of America ranks middle of the pack on global indexes. This, according to the prescribed method of quantifying, means the U.S.A. is relatively homogeneous. However, the U.S.A., historically, has mistreated minority groups and even now, in contemporary times, serious concerns for the peace of minorities exists.
16. Political Effectiveness: 3.0
65% of Americans are dissatisfied with the nation's system of government and how well it works, the highest percentage in Gallup's trend since 2001. Dissatisfaction is up five points since last year, and has edged above the previous high from 2012 (64%). Though, with the current situation in the White House this trend does not seem like it will improve.
In the United States, the political system in place is designed to allow for the creation and enforcement of laws on a state and local level, so long as there are no conflicts with federal law. While this can lead to problems regarding uniformity in punishment across states, it acts as an effective tool for both urban and rural areas to develop measures to deal with local issues. Additionally, the president may enact executive orders, which hold similar power to federal law, that can then aid in responding to a crisis such as a natural disaster. This has been seen in response to 9/11 (homeland security) though there have been times where more has been desired such as FEMA’s response to Hurricane Katrina.
17. Institutional stability: 4.5
It has been already demonstrated that economic institutions (such as property rights, regulatory institutions, institutions for macroeconomic stabilization, institutions for social insurance, institutions for conflict management, etc.) are the major source of economic growth across countries (Rodrik 2007).
Institutions within the United States have remained considerably stable over the years. Within the government, there are term limits for certain positions which can make things somewhat unstable due to changes in leadership, however the potential destabilization is mitigated in severity due to the checks and balances in place to ensure that the political system runs effectively. The most notable of these checks and balances are the Constitution and the three branches of government. Outside of government, these term limits do not apply, which allows for increased stability in other institutions such as schools, courts, and businesses, as well as others.
18. Honest Government: 2.5
The public’s trust in government remains at historic lows. It has been already demonstrated that economic institutions (such as property rights, regulatory institutions, institutions for macroeconomic stabilization, institutions for social insurance, institutions for conflict management, etc.) are the major source of economic growth across countries (Rodrik 2007). Today, just 19% say they trust the federal government to do what is right always or most of the time, which is little changed from recent years. Fewer than three-in-ten Americans have expressed trust in government in every major national poll conducted since July 2007 – the longest period of low trust in government seen in more than 50 years.
This distrust in government can lead to reduced economic growth, as citizens will have less confidence in making investments and other economic decisions. However, according to the Corruption Perceptions Index in 2016, the United States ranked 18 out of 176 for least corrupt countries, scoring a 74 out of 100. This suggests that while American trust in government may be incredibly low, it is not necessarily representative of the actual degree of corruption in the United States.
19. Common Laws: 3.0
The Constitution states that everyone is created equal, and, therefore, receives the same rights. Despite this money and power can be used to leverage the system. Court cases in which one party’s resources outweighs the other one party can often draw out the case and force the other party into withdrawing or settling. This is done by breaking up resolution conversations. Tactics such as this are used to manipulate the system. There are also many different types of laws, which not all citizens are subject to. There are federal, state, and county laws. This means not all citizens are subject to the same laws.
This imbalance in power is quite plutocratic in nature, and does not represent the interests of the majority. Everyone is supposedly given an equal and fair chance in law but that is not necessarily true here which is why the score given has room for much improvement.
20. Central bank: 3.0
The central bank of the United States is the Federal Reserve, whose primary goal is to promote the growth and stability of the United States economy. The Federal Reserve has a number of tools to assist in implementing and enforcing economic policies, such as Reserve Requirements, which requires banks and other depository institutions to hold a percentage of cash deposited while the rest may be used for loans and other purposes. This tool alone grants the Federal Reserve incredible power over the economy, as the amount designated by the Reserve Requirement is used in calculating the Deposit Multiplier.
While the Federal Reserve's goal is to produce the most good for the economy and has effective means of managing commercial banks and monetary policy, it is not completely independent of political control. The Board of Governors of the Federal Reserve are appointed by the President with consent of the Senate, and may hold their positions for a maximum of 14 years.
21. Domestic budget management: 2.5
Over the past four years, the US has constantly spent above 100% of its total tax revenue with 2013 being its peak with about 22% over. The United States of America’s expenditures regularly exceed its total annual tax revenue. For example, in 2016 the U.S. government collected $3.726 trillion in tax revenue and budgeted $3.999 trillion in spending, roughly 10% more spending than money collected. This policy gets a low score because the us government has consistently spent over 10% of its total expenditures but a majority of it goes to healthcare and military spending.
22. Government debt: 1.5
In the last thirty years the US government debt has skyrocketed. As a percentage of GDP the national debt is approaching 100% and is projected by the Congressional Budget Office to reach 150% by the year 2050, well surpassing the most debt the US has ever held during world war two. The 19.8 trillion owed by the federal government amounts to 210 thousand per american citizen. About half of the debt is owed to foreign investors and governments, and about a third is owed to government agencies like social security and other retirement funds. All payment made on this massive and growing debt will negatively affect US wealth creation for the distant future.
Debt of this magnitude is incredibly harmful to the United States economy, as money that would otherwise be spent on wealth creating activities must instead be used to pay back this debt. This debt is also showing no signs of declining. For this score to begin to improve, debt as a percentage of GDP would need to show signs of a decline to represent that there is progress being made to reduce debt.
23. Economic statistics: 4.0
The United States has a number of agencies that publish and analyze economic statistics. This includes a large variety of agencies such as the Bureau of Economics, Department of labor which heads the Bureau of Labor Statistics, who calculate productivity, price index, and unemployment statistics. The Department of the Treasury which compiles quarterly economic data tables. The US Census Bureau which calculates the nation's population and demographics. The Federal Reserve Bank which publishes economic research papers. And the CIA World Fact book which collects and compiles data from every country in the world. These agencies publish statistics to the internet, where they can be scrutinized by the general public.
They come from many respected and credible sources leaving these statistics to be trusted by those looking to start a business.The overabundance of statistics in the US makes it possible for investors, entrepreneurs, and everyday people to have access to an abundance of information published by viable sources.
24. Protection of public health and safety: 3.7
The United States has a number of agencies dedicated to public health and safety. This includes the Department of Health and Human Services, which includes agencies such as the Centers for Disease Control and Prevention; The Centers for Medicare and Medicaid Services; The National Institutes of Health, FEMA; and more. These agencies include action in times of natural disasters and state emergencies such as Hurricane Katrina (2005). Recovery often begins while emergency response activities are still in progress. The disaster recovery process focuses on restoring, redeveloping, and revitalizing communities impacted by a disaster.
In 2010, the Affordable Care Act was passed. This provided millions of Americans medical coverage, and prevented individuals from being denied coverage due to being poor or having pre-existing conditions. These agencies and laws aim to improve the quality and length of the citizens lives. With current administration failing to replace and destroy Obamacare, Americans will continue to be medically covered giving the USA a good score.
25. High Wage Policies: 3.0
The United States has a number of minimum wage laws that differ across the nation. There are federal, state, and county laws that dictate minimum wage. The minimum wage changes to adjust for the cost of living in each area. The federal minimum wage is $7.25 per hour while double in cities such as San Francisco at $15.00. Though relative to the location, one thing remains true – the minimum wage is not enough to barely get by leaving no options for saving or progressing financially.
Today minimum wage is 25% less than what it once was in 1968 at $1.60 or $10.86 in today’s dollars. The median income in the US today is $55,775. This is barely enough to afford to live in the country’s largest cities with little left over for savings and discretionary consumption. The economic effects of raising the minimum wage are controversial. Adjusting the minimum wage may affect current and future levels of employment, prices of goods and services, economic growth, income inequality and poverty. The interconnection of price levels, central bank policy, wage agreements, and total aggregate demand creates a situation in which the conclusions drawn from macroeconomic analysis are highly influenced by the underlying assumptions of the interpreter.
26. Environmental protection: 3.0
Today, as in the past, the Clean Air Act continues to cut pollution and protect the health of American families and workers. Fewer premature deaths and illnesses means Americans experience longer lives, better quality of life, lower medical expenses, fewer school absences, and better worker productivity. Between 1970 and 2011, aggregate emissions of common air pollutants dropped 68 percent, while the U.S. gross domestic product grew 212 percent.6 Total private sector jobs increased by 88 percent during the same period. Under the CWA, EPA has implemented pollution control programs such as setting wastewater standards for industry. We have also set water quality standards for all contaminants in surface waters. Leaving the country as whole to drink cleaner water and breathe clearer air going hand-in-hand with improving the economy.
The US Environmental Protection Agency currently has an annual budget of 8.1 billion dollars and over 15,000 employees. Though the United states has the resources and man power to make great strides towards a cleaner environment the current office in command does not believe in climate change and its devastating repercussions leaving USA with a neutral score.
27. Strong Army: 5.0
The United States is internationally known as the global superpower of the world leaving its citizens with piece of mind when it comes to protection of borders. It ranks number 1 in military spending with a budget of $601 million. This budget entails active frontline personnel of 1,400,000 - 8,848 tanks, 13,892 total aircrafts, and 72 Submarines. This also includes the most cutting-edge military technology not to mention, the world’s largest nuclear arsenal. Global Fire Power has ranked USA #1 in terms of arsenal strength in the year 2017.
With regards to what percent of the domestic budget military spending makes up, 53.71% of federal discretionary spending is budgeted towards military. However, when factored in with mandatory federal spending and interest on debt, military spending makes up only 15.88% of all federal spending, making the cost lower than one-third of the domestic budget.
28. Foreign trade impact: 4.2
The United States GDP is 28% comprised of foreign trade. Imports of goods and services make up approximately 15.45% of the GDP, while exports of goods and services make up just over 12.55% of the GDP. Totaling about one third of the nation’s GDP displays the US is not too vulnerable to outside forces, nor losing a considerable amount of wealth for its citizens through lack of trade.
This percentage, however, has steadily increased from about ten percent in the 1960’s as the world economy has globalized. If the trend continues the US economy could become overly dependent on imports and exports and therefore vulnerable to changes in outside economies.
29. Management of foreign currency budget: 2.5
The United States has a considerable imbalance in its management of foreign currency. Specifically, the United States is facing a large deficit in foreign currencies. Far more money is being spent on imports than is being earned through exports, creating a massive imbalance between the two.
In 2016 American exports of goods totaled 1.5 Trillion and exports of services totaled 750 Billion. However, imports of goods totaled 2.2 Trillion and imports of services totaled 501 Billion. When imports outnumber exports, the difference is subtracted from GDP, and less GDP then leads to lead to less employment. The trade deficit also makes the US economy more dependent on other countries thus given the score for this policy.
30. Layers of collective action: 4.5
Forbes in 2017 ranked the USA #1 in personal freedom stemming from our first amendment of freedom of speech. Everyday citizens being able to voice their opinions to the many small body and local boards and councils. Holding local elections grants citizens, a voice in how their local communities develop, creating motivation to maintain a healthy, positive community. Census Bureau Reports There Are 89,004 Local Governments in the United States. Thus, showing the ability for members of the community to have their concerns, comments, and questions addressed by their local government without having to depend on a single centralized government in Washington. This decentralized approach allows citizens to have municipal elected officials in their town – willing and able to understand and hear out what their fellow members of the community have to say.
This ability to collectively have “stock” in the country adds to the liberty of association –specifically raising funds for a collective initiative. Volunteering is a prominent part of US culture when dealing with business as Bureau of Statistics for 2015 states, about 62.6 million people volunteered through or for an organization at least once between September 2014 and September 2015.
31. Pro-business climate: 4.7
The United States is the quintessential example of a Pro- business climate – the land of opportunity, the “American Dream”. Innovation in business is a constant while setting the global trend and standard for enterprises. The US has the most technologically powerful economy in the world, with a per capita GDP of $54,800. US firms are at or near the forefront in technological advances, especially in computers, pharmaceuticals, and medical, aerospace, and military equipment.
Entrepreneurship though faced with many initial obstacles, are widely recognized as the foundation for the nation with a GDP of almost 18 billion (17.947 B). Starting a business in the US also comes with freedoms that are not present in the business world of our global competitors. US business firms enjoy greater flexibility than their counterparts in Western Europe and Japan in decisions to expand capital plant, to lay off surplus workers, and to develop new products. This flexibility and freedom created the pro-business climate we celebrate today.
32. Government enterprises: 3.0
The US government serves as a neutral funder in industries such as energy, farming, and oil where a majority of subsidies end up. Supporting these fields enough to allow the general public to benefit from what these industries deliver. Though, the government also puts a hand in the free market, interfering in said market when programs are poorly implemented - issuing billions of dollars annually in subsidies in major industries mentioned such as farming (Agricultural). The Agricultural Risk Coverage and Price Loss Coverage programs, which pay farmers when their revenue per acre falls below a certain benchmark or the national price of certain crops falls below the crop's reference price ultimately affecting the GDP.
Inversely, the GDP is also positively affected when the government sends subsidies to large corporations such as Boeing, Nike, and IBM all receiving billions of Uncle Sam’s money that pours into the circular flow of money allowing business to supply more – so that consumers could spend more. As per the Bureau of Economic Analysis, government enterprises made up $53.1 billion of the total $18.57 trillion GDP. This is not a substantial percentage giving the US the positive score on this policy.
33. International security agreements: 4.5
International unrest continuing to flood mainstream media is a possible deterrent to those looking to open up a business in the USA though throughout history and with the current treaties in place – America has a great track record when dealing with international security.
America’s role as overseeing and proofing treaties displays both its military dominance and security for those looking to reap the benefits from the economic affairs of these treaties and agreements. Most notable of these are the North Atlantic Treaty Organization and the Rio treaty, which consist of 27 and 21 countries respectively, not counting the United States. The backing from these nations show the formidable defense of the USA when dealing with any imminent threat leaving the average business owner with piece of mind.
34. Protection of domestic enterprises from government mandated costs: 2.6
Small businesses in the United States continue to bear most of the burden that is– federal regulations. As per the SBA, the cost per employee for firms with fewer than 20 employees is $7,647. On a per employee basis, it costs about $2,400, or 45 percent, more for small firms to comply than their larger counterparts. Environmental and tax compliance regulations appear to be the main cost drivers in determining the severity of the disproportionate impact on small firms. According to the White House government site, In 2015 alone, federal regulations cost the American economy more than $2 trillion. That is why the President has proposed a moratorium on new federal regulations and is ordering the heads of federal agencies and departments to identify job-killing regulations that should be repealed.
Along with a variety of costly regulations to start a new business in the USA, President Trump intends to continue to implement policies of protectionism to retain jobs in specific industries in the country. Though most business outsource to remain profitable he states the he will use a 45% tariff on Chinese imports and to bully firms into returning their factories to America. Though these plans to impose tariffs would give this policy a higher score – they are just plans. Protectionism is widely viewed as having a negative effect on the economy as it restricts free trade and growth, and typically costs more to implement than its benefits. In 18 of the 31 cases, the cost per-job-saved is $100,000 or more per year; the largest losses, $27 billion per year, come from protecting the textiles and apparel industry. The slew of regulations hinders the initial onset of a new business limiting expansion and freedom of profitable trade.
Four studies of the economic policies of the United States of America are presented here. The fourth study presented is by native born United States student Hanna Batla. Specialist Hanna Batla's analysis is presented immediately below. To read further studies by other native born Specialists, scroll through this page. The ratings herein are based on the following rating scale:
5.0 Perfect Facilitation of Wealth Creation
4.0 Midway between Perfect and Neutral
3.0 Neutral Effect on Wealth Creation
2.0 Midway between Neutral and Obstructionist
1.0 Perfectly Obstructionist to Wealth Creation
[Rating scale copyright Mike P. McKeever, 2018. Used herein with permission]
RATING SUMMARY - HANNA BATLA POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE 1 5.0 15.0 15.0 100 % 2 5.0 15.0 15.0 100 3 2.5 7.5 15.0 50 4 4.0 12.0 15.0 80 5 4.0 12.0 15.0 80 6 5.0 15.0 15.0 100 7 4.0 12.0 15.0 80 8 2.0 6.0 15.0 60 9 2.5 7.5 15.0 50 10 5.0 15.0 15.0 100 11 2.0 6.0 15.0 40 12 4.5 9.0 10.0 90 13 4.0 8.0 10.0 80 14 5.0 10.0 10.0 100 15 4.0 8.0 10.0 80 16 4.0 8.0 10.0 80 17 4.0 8.0 10.0 80 18 3.0 6.0 10.0 60 19 3.5 7.0 10.0 70 20 4.0 8.0 10.0 80 21 3.0 6.0 10.0 60 22 1.5 3.0 10.0 30 23 4.5 9.0 10.0 90 24 4.5 9.0 10.0 90 25 1.9 3.8 10.0 38 26 2.5 5.0 10.0 50 27 5.0 10.0 10.0 100 28 3.0 6.0 10.0 60 29 2.5 2.5 5.0 50 30 5.0 5.0 5.0 100 31 3.5 3.5 5.0 70 32 2.8 2.8 5.0 56 33 4.5 4.5 5.0 90 34 2.8 2.8 5.0 56 TOTAL 124.0 267.9 365.0 73.4% ===== ====== ===== =====
INDIVIDUAL POLICIES - HANNA BATLA
1. Freedom From Internal Control- 5.0
All United States citizens are allowed the freedom of engaging in any activities that aren’t explicitly prohibited by U.S. law. This freedom has very few limitations that can easily be overcome, such as liquor licenses, or business permits, the majority of limitations are put in place solely to regulate safety and create equal opportunities. The allocation of so many freedoms to citizens of the U.S. is only a positive incentive to start businesses, leading to the creation of economic growth.
2. Freedom of Speech- 5.0
Considered the most imported aspect of the United States, the guarantee of freedom of speech is outlined in the First Amendment of the United States. This freedom allows for protests, petitions, criticisms of individuals or the government, and general criticisms. This freedom allows for the circulation of thoughts and ideas ultimately resulting in a positive effect on U.S. society as whole, as well as the economy. While “Hate Speech” is also protected by the First Amendment, the actions of violence that result from it are not, and treated with an even higher level of disdain, such as lengthened prison sentencings.
3. Effective, Fair Police Force- 2.5
While the United States holds the top ranking for highest incarceration rate in the world with over 2 million people currently incarcerated. However the racial and ethnic disparity between the large percentage of blacks compared to the minority of whites in prisons is almost the opposite of percentage of blacks and percentage of whites in the general population. Socioeconomic status creates an even larger disparity in incarceration statistics, with a strong majority of inmates coming from low socioeconomic status and remaining incarcerated longer than their counterparts from higher socioeconomic status. These statistics have not fallen on deaf ears of the American people, whose current view of the police force is at an all time negative. The role of racial bias seems to be the line in which people lose their faith in the fairness and effectiveness of the police force. Recent cases such as the deaths of Eric Garner and Philando Castile have shown to be the catalysts in protesting police brutality. The widespread movements have garnered both positive and negative results, but nonetheless has shown a light on the free reign of the police, and created a persona that applies to all police officers, guilty or not.
4. Private Property- 4.0
The United States outlines the importance of protecting private property, both material and intellectual, in the Fourth Amendment of the Constitution. The amendment states that personal, private property is safeguarded against unlawful search and seizures. In regards to the protection of intellectual property, copyright law protects those whose work has been copied and used without permission, and allows for legal action to be taken against the perpetrator. However, the United States government is entitled to a legal loophole in order to seize a citizen’s private property, such as land, by utilizing eminent domain. The Police Power delegated to the government in the 10th Amendment of the U.S. Constitution allows for federal, state and local governments, as well as their agencies to use exercise this power, and the ability to extend it to private companies, to seize private property for the function of public use, provided they fairly compensate the original owner. Public use projects can include the construction of railroads, power plants, public parks, etc. While this loophole obliterates the strict morality of the protection of private property in the United States, it benefits the overall public community. Aside from the rare cases of the government utilizing eminent domain, due the overall importance of private property, both intellectual and material, business owners and entrepreneurs in the United States have no reason to fear the loss of profit due to stolen property.
5. Commercial Banks- 4.0
Commercial banks in the United States are widely used by the American people due to their faith in banks for safeguarding and holding their wealth. By having individuals deposit their funds, the bank is given access to capital available to loan out. Even though commercial banks are private, they adhere to regulations (ex., reserve requirements) set forth by the central bank of the U.S., the Federal Reserve. The ability for banks to loan out funds strengthens the overall economy and stimulates growth within the country.
6. Communication Systems- 5.0
Communication systems are omnipresent throughout the entire United States. According to data collected in 2016, 95% of all Americans own a mobile phone, with 77% owning a smartphone. 118.4 million households own a television and 87% of all Americans use the internet. Theses statistics not only prove the rising necessity of communication systems, but the ongoing and potential economic success that derives from having an extensive network of communication. By having an (almost) entire country connected with each other, the facilitation of ideas and opportunities seems inevitable.
7. Transportation- 4.0
U.S. transportation systems have emerged to meet the needs of multiple methods of transportation, including roads, rail, airports and waterways. However, only a small percentage of American cities have the beneficial use of multiple systems in a single market. Large metropolitan areas such as New York City, Chicago, San Francisco, provide mass transit systems for their residents (bus lines, underground rail, etc), furthermore as hubs for people and merchandise travelling long-distance. Because multiple forms of mass transit is limited to large, urban cities, the majority of Americans are reliant on personal automobiles. The majority of freight transportation is carried by trucks, followed by rail. As of 2017 there are 4.12 million miles of road, 2.94 million of those miles are located in rural areas, with the remaining in urban areas. While methods of transportation have generally stayed the same for the past few decades, the advancement of technology has streamlined the efficiency of these methods and decreased travel time for both people and merchandise, a positive effect on national commercial activity.
8. Education- 2.0
The United States government sacrifices the education of Americans in favor of extreme military spending and tax cuts. The effect of this is evident in rankings compared to other countries in terms of academics that are necessary for success, currently ranking 17th in education and 1st in military spending. The rising price of higher education, 1120% more compared to 1978, has led many Americans to forgo their degree and immense debt in favor of immediately joining the workforce. The lack of higher education in the workplace holds back the country and the economy as a whole. The advancement of technology leads to a healthier economy and streamlines more innovation. Those who remain in the workforce with little education are often replaced with new advancements, and left unemployed with no desirable skills. The problem not only stems from lame government attempts to fix the situation, but higher education institutes focuses on business models that generate immense profits using high tuition rates and focusing less on educating an entire generation. Viewed as the most powerful country in the world, the United States should be embarrassed by their education system and taking active steps to improve it for the well being of its citizens.
9. Social Mobility 2.5
While upward social mobility is achievable in the United States, it has become increasingly difficult due to the growing wage gap between the upper class and the lower class. Wage inequality has been on the rise for the few past decades and showing no future decline. The power of personal connections and networking has taken a front seat in the search for a career, deciding those who move upward and those who remain stuck. The negative implications of this undermine the actual qualifications needed and instead rely on who you know, and mutual friends. The incredible high price of education also creates a barrier in climbing up the professional and social ladder. The “equality for all” mantra of the U.S. is disproven when the necessary resources to succeed are not available to the lower class. Barriers for social mobility hinder overall innovation and wealth creation.
10. Freedom From Outside Control - 5.0
All those residing legally in the United States (citizens, green card/ visa holders, etc.) have no reason to fear foreign governments enacting their removal. Those who have arrived illegally, either by entering illegally or overstaying their visa, risk deportation to their home country. However, both legal and illegal persons in the U.S. are subject to U.S. laws, be it federal, state or local, as well as constitutional rights. An exception to the freedom of outside control is extradition. The extradition clause in the United States constitution requires the U.S. to deliver a fugitive to the state in which the crime was committed at the request of the foreign government. The extradition of a U.S citizen is only conducted with countries in which a dual extradition treaty has been signed, as of 2017 there are 100 countries with extradition treaties with the U.S. People who enter the United States illegally on the grounds of asylum (fearing persecution from their home country on the grounds of religion, race, political opinion, etc.) are granted a stay and will not be returned at the request of their foreign government. The independence the United States has from foreign governments provides stability and simplicity for businesses and their consumers who need only to abide by U.S. laws.
11. Protection of Domestic Enterprises- 2.0
As of March 2017, the Balance of Payments (BOP) was a negative $43.7 billion. This means that the number of imports was exceedingly higher than that of exports, causing a deficit that negatively affects the US GDP. This data suggests that American companies are unable to compete with the low costs of foreign companies. U.S. free trade agreements allow for considerable outsourcing of labor to smaller countries with low wages, minimal work safety regulations, and tax loopholes. While the outsourcing benefits the profit margins of U.S. based companies, Americans are left unemployed and a weight on the circular motions of the economy. The United States government’s abysmal efforts in protecting American workers and creating incentives for U.S. companies to remain domestic is the reason for the low score.
12. Foreign Currency Transactions - 4.5
While the US Dollar is the only legal tender recognized by the United States, the steady rise of peer to peer transactions has allowed cryptocurrency (Bitcoin, Etherum, etc.) to gain standing in conducting transactions. The majority of U.S. banks will exchange foreign currency at the set exchange rate, as well as well as exchange foreign credit card purchases to US Dollars and vice versa. This allows the USD to be the dominant currency in the US providing ease and streamlining efficiency for business owners. While cryptocurrency has not been nationally accepted, growing popularity has led it to become accepted as a form of payment for certain stores and other private payments. The future of cryptocurrency has led the government to become skeptical about its integration as a worldwide currency, as it provides useful to black market operations given its untraceable characteristics. The rising power and value of cryptocurrency also threatens the US Dollar’s status as the dominant world currency.
13. Border Control- 4.0
The purpose of border control in the United States is to prevent illegal aliens, terrorists, human trafficking and contraband from entering the country. As of 2017, the total budget for the Customs and Border Protection agency (CBP) is $13.9 billion. Immigration laws set an annual worldwide limit for permanent immigration at 675,000 with exceptions for immediate family. In 2016, 11.3 million people living in the United States were undocumented, and therefore illegal. Of the total number of undocumented immigrants, 5.6 million (50%) had come from Mexico. The U.S. government considers the southern border to be the largest threat to its border control, allocating 1.5 billion per year to US Border Patrol, the mobile unit of CBP tasked with patrolling and securing America's borders. The negative connotation of illegal immigration with violence, drugs and harsh economic effects allow extreme measures to be taken by the government. Then GOP Presidential candidate Donald Trump campaigned heavily on the promise of building a wall stretching all 1,993 miles of the southern border in order to control immigration as well contraband brought into the U.S. Those who cross the border usually do for two different reasons, the financial gain of trafficking illegal drugs to meet the extremely high demand or to permanently move in order to earn a greater standard of living for themselves and their family. The promise of the “wall” situated well with many Americans who use immigrants as scapegoats for economic and social issues. The country divides among those who want to deport those living in the U.S. illegally and those who want them to be permitted a path to citizenship.
14. Currency - 5.0
Until 1971, the value of the US Dollar was directly anchored to the value of gold, easily convertible internationally, and would rise and fall with the price of gold. In 1971 President Nixon cancelled the convertibility of dollars to gold (or any precious metal), and allowed the US Dollar to become fiat money. Today the dollar remains fiat money, retaining value and power due to government enforcement. The power and stability of the dollar remains due to the confidence of the people who use it. The US Dollar is the only official currency of the United States, and conducts all transactions in the country, with the small exception of cryptocurrency now on the rise. Having a single currency simplifies the conduction of transactions, creating positives for commerce and the U.S. economy with its efficiency. The Federal Reserve is responsible for printing all currency, independent from the federal government, and is able to control how little or how much currency is put into the economy. The dollar holds a large role as the world’s dominant reserve currency benefitting both foreign countries and the U.S. as it lowers interest rates on borrowing, giving the U.S. a $100 billion advantage per year. The US dollar is also considered a de facto worldwide currency, used in international transactions and investments. The global trust in the value of the dollar only improves the overall U.S. economy.
15. Cultural, Language Homogeneity 4.0
The United States was called a melting pot, a negative term used to describe the diversity and assortment of races in one single country. The mix of culture, widespread diversity is now considered a positive aspect of the U.S. American ideals incorporate “All men are created equal”, using laws to ensure discrimination does not affect employment, education or social aspects of society. American values promote that everyone is entitled to success regardless of background. However, cultural and language barriers still exist, putting a damper on growth, only 80% of Americans speak english, holding the U.S. from reaching the full potential that exists from being so diverse.
16. Political Effectiveness - 4.0
While federal laws blanket the entire country, state and local levels governments are provided with the constitutional power to enact their own laws (not conflicting with federal laws), in order to meet the needs of their constituents. Presidential powers include the ability to evoke Executive Orders, orders that hold the same weight as federal law. This action allows for quick response to natural disasters, terrorist attacks, monetary crises, etc. When the terrorist attacks of 9/11 occurred, the Department of Homeland Security was formed almost immediately to create a plan of action. Political effectiveness has been weak in the past such as in the case of response to Hurricane Katrina, but improved significantly as shown in the case of Hurricane Sandy, just 4 years later.
17. Institutional Stability - 4.0
Political institutions in the United States have remained relatively stable over the past years. Laws and policies often lag to keep up with changing times, but in most cases seem to conform to the needs and wants of the American people. The constitutional system of checks and balances has provided stability within the country having also eased public perception into a more favorable account of the U.S. Ensuring constant stability in the political and social sphere, allows for a decreased risk of business failure, subsequently leading to higher investment and success. The framework that provides each branch of government to avoid overlap leads to the progress of education, law enforcement and business.
18. Honest Government - 3.0
At the start of 2016, 81% of Americans believe that the United States Government is corrupt. The Transparency International Corruption Perception Index ranks the U.S. at #18 out of 176 countries, being given a score of 74 (100 being no corruption). While this mindset may be wrong, in this case, it carries more weight than factual support, subsequently leading to negative effects on the U.S. economy. This public perception was capitalized on by President Donald Trump at the time of his campaign, promising to “drain the swamp”. Even though a percentage of corruption and illegality exists in the U.S. government, citizens, members of congress and independent agencies, such as the FBI, devote resources to ensure corrupt politicians and their schemes, are exposed and removed from public office.
19. Common Laws - 3.5
The United States Constitution states that “All men are created equal”, leading to the assumption that all citizens should not only receive the same rights as others, but also be treated equally under the law. In any political system, corruption and bias find their way in. The United States justice system is no different.
The laws that encompass the United States are not uniform for every citizen. The levels of federal, state and county laws can all provide different outcomes dependent on location.
The foundation for the U.S. justice system is to be judged by a jury of peers, in this sense, racial and financial bias can arise against a defendant. The most controversial aspect of the justice system is that a verdict is not reached solely on facts or evidentiary support, but rather with biases, personal preferences and mindset. These unfortunately allow for certain cases to receive unfair sentencing, prejudice and innocents to be jailed and guilty to be free. The constitution of the United States calls for a fair and balanced justice system, that punishes criminals and protects society. However, those with unlimited resources and dire situations feel entitled to use their wealth and status to jump through legal loopholes and use high-priced counsel to achieve their desired outcome with no repercussions. These actions not only take away faith in the legal system, as well as create negative effects on the economy.
20. Central Bank - 4.0
The Federal Reserve is the central bank of the United States. The Fed. is an independent from the government aside from congressional oversight. The ultimate goal of the Federal Reserve is to promote and stabilize the economy of the U.S. In order to cause effect on the economy, the Fed can only change the quantity of money in the overall money supply by printing or destroying currency. The Fed. is also responsible for managing and regulating commercial banks using tools such as reserve requirements, asset backed securities and the discount rate. The independence from political influence arises from chairs being appointed every 14 years to avoid any collusion with normal election cycles.
21. Domestic Budget Management- 3.0
Excluding the years from 1997 to 2000, the United States has experienced a consistent budget deficit. While deficit spending in times of recession can boost economic growth by promoting spending, times of expansion should be times where the United States spends only what they collect from overall tax revenue. By failing to balance the yearly domestic budget, the U.S. is only restricting job growth and overall economic prosperity, due to the fact that deficit spending requires borrowed foreign funds, which cannot be used to expand and promote businesses. As of 2016, the deficit is 15.2% of the budget.
22. Government Debt- 1.5
When a country is responsible for a large amount of debt, the main priority shifts from creating positive growth in their own country through investment, to repaying debt with as little interest payments as possible. As of January 2016, the United States is sitting on $18.96 trillion of debt. This is 104% of the U.S. GDP. This percentage only solidifies the U.S. status as being excessively indebted. Projections made by the Congressional Budget Office only see the debt level increasing, with no signs of declination in the next 30 years. This extreme level of debt in the United States only produces negative effects, as the government has little or no liberty to invest in wealth creating programs, ultimately decreasing overall GDP.
23. Economic Statistics- 4.5
In order to educate the general public as well as business owners about business opportunities, the United States publishes economic statistics from multiple federal and state departments. With the ease and availability of the internet, the Department of Commerce, Bureau of Economics and the Census Bureau, are able to give the public information that can ultimately increase economic investment and lower business risks. Statistics have been found to be for the most part accurate and abundant, but respective to the current administration, biases can arise in order to create a more positive output in order to gain leverage in the upcoming election cycles.
24. Protection of Public Health & Safety- 4.3
The United States prides itself on its ability to not only provide fro but also protect its citizens. The U.S. has established multiple agencies and departments to regulate waste, food inspection, the spread of viruses as well as to fund research to prevent premature death due to poor health. Two main causes of death in the United States, heart disease and cancer, have pushed the National Institute of Health to allocate 10 billion dollars to research for treatment and cures. In 2010, the Obama Administration implemented the Affordable Care Act, which sought to increase the amount of Americans who have health care, in order to insure treatment when needed, regardless of a patient’s income or value. Infant mortality is at 5.8, which ranks the U.S. at 170 out of 225. Another indicator of public health is tuberculosis rates, which is constant at about 3.0% since 2013.
25. High Wage Policies- 1.9
The United States has implemented a federal minimum wage of $7.25, having remained the same since 2009. Adjusted for inflation, the current minimum wage is less than was was being mandated in 1968. Most often, the federal minimum wage does not align even in the slightest with the cost of living in certain areas. In these cases, the ineffective min. wage is replaced by the city or the state's own minimum wage. For example, San Francisco, California is considered the most expensive city in the United States due to the cost of living, because of this, the city of SF has implemented a min. wage of $13.00. But as cities raise their wages, the cost of living also rises. The city of Orlando, Florida has a minimum wage of $8.10 due to the fact that it’s cost of living is much lower than the city of San Francisco, yet still higher than what could be livable on the federal minimum wage. Most Americans making only minimum wage, regardless of their city, can barely afford their basic needs. The U.S. government has implemented programs such as Medicaid, Obamacare,Welfare and vouchers for private school, but more and more Americans are falling into poverty and unable to get out.
26. Environmental Protection- 2.5
The Environmental Protection Agency was created to protect and ensure human health, as well as preserving the environment. In 2016, the EPA received $5 trillion to take action on ensuring clean air, clean water, researching negative effects on our climate and to enforce federal regulations that protect the citizens and environment from harm. The EPA is considered a regulatory agency as congress allows for them to write regulations that can be enacted into law. The current administration has cut funding for the EPA, left an international accord to decrease greenhouse gas emissions, and proposed a repeal of the Clean Power Plan, which sets standards on carbon pollution from power plants. The world is entering a long awaited fear of the effects of environmental change, while the United States government is carrying on with intense pollution caused by human activity with no changes in sight.
27. Strong Army- 5.0
The United States not only has the largest military presence in the world, but also ranks No. 1 in defense spending with $611 billion, outspending the next seven countries combined. The U.S. has also created an intricate system of promoting the best defense, such as specific departments as well as several intelligence agencies reaffirm the U.S.’s place as not just the strongest military in the world, but also the most capable. Americans can feel a sense of safety and comfort knowing that the United States’ military is effective against external sources, but also internal. After detrimental attacks on U.S. soil, such as 9/11, the United States went on the offensive, and remained on high alert that provided Americans reassurement that their country was stable and willing to seek vengeance on their attackers. The Department of Homeland Security was created after the events of 9/11 to ensure protection against another attack and to ease the minds of worried citizens.
v http://www.allgov.com/departments/department-of-homeland-security?details DepartmentID=571
28. Foreign Trade Impact- 3.0
The United States total GDP is made up of about 28% of foreign trade. Holding almost ? of the total GDP, the U.S is neither failing to provide employment for it’s citizens, nor relying too much on foreign trade that could make its economy vulnerable to outside forces. This percentage has steadily increased since the 1960’s, and if the trend continues with the same pattern, the U.S. could become more and more dependent on foreign trade. While there is a deficit between money spent on imports and money earned on exports, 41 million jobs are dependent on foreign trade.
29. Management of Foreign Currency Budget- 2.5
In 2016, the United States totaled $2.2 trillion in exports, and $2.7 trillion in imports. This imbalance created a $500 billion deficit. Because of this imbalance, the US total GDP is negatively affected, and a lower GDP leads to lower employment. Although these reasons should garner this policy a low score, the United States participates in a healthy amount of foreign trade and the amount of imports give American consumers more purchasing power.
30. Layers of Collective Action- 5.0
One of the main fundamentals inscribed in the United States constitution is the right to vote. This right extends to local, state and federal levels, by providing multiple levels of government communities and states are able to decide what’s most beneficial for their own surrounding area and Federal government is able to provide services and resources at large. Collective action in the U.S. doesn’t just constitute the right to vote, but also the right to assembly. Women’s rights, LGBTQ rights and grassroots political movements have all created campaigns with their own network of supporters that work together to achieve goals that ultimately benefit society. The ability for people to discuss their issues and work together to change laws, or create new laws cannot be infringed.
31. Pro-Business Climate- 3.5
The United States claims to be a strong capitalist environment, with high regard for self-made worth and entrepreneurial success inspiring other Americans to follow in their footsteps. The government also provides assistance with providing subsidies, tax breaks and tax incentives to ensure a healthy economy and promote business and economic growth. The entire American Dream is built upon the success of the pro-business climate in the U.S. Especially for small businesses, laws like the Sherman Antitrust Act provide assurance that monopolies won’t be
able to dominate an industry. While regulations are beneficial to society as whole, and businesses in long-term, they have caused American companies to outsource their production in countries with looser regulations such as regulations on labor wages.
32. Government Enterprises- 2.8
The United States involvement in subsidies is most often directed to the agriculture, oil, and alternative energy industries. Tens of billions of taxpayer dollars are used annually to fund these enterprises. And while subsidies benefit the overall GDP, the government interference in the free market is a negative role. The interference of subsidies also reduce the pressure for innovation and new technology in the preferred industry. The U.S. government has also undertaken Fannie Mae and Freddie Mac, which provides stability in the mortgage market and protects housing, effectively helping the overall economy. In 2008, the U.S. government created TARP, which allocated $700 billion taxpayer dollars to bailout large business and banks from bankruptcy.
33. International Security Agreements - 4.5
The United States has actively seeked out and upheld their role in multiple treaties and agreements with other countries, including the United Nations, Rio Treaty and NATO. The North Atlantic Treaty Organization, considered to be the world’s strongest alliance, with 28 countries declaring “an attack on one is an attack on all”. In total, the United States has defense agreements with 52 other countries. The motive for joining all these agreements is ultimately for the benefit and safety of the American people. The United States also employs a State Department, fitted precisely to communicate with other countries and create a safe worldwide environment. Due to the the terms in these agreements, the United States is legally obligated to protect 25% of the world’s population.
34. Protection of Domestic Enterprises From Government Mandated Costs- 2.8
The United States prides itself on being a capitalist economy, with a strong free enterprise system in place. The U.S. has implemented multiple regulations and policies that both big and small businesses must abide to. These policies are not in place to discourage people from starting their own business, but to ensure both long-term growth as well as positive effects on society as a whole. Regulations that do so include, Antitrust laws, to allow fair opportunity and avoid monopolies, the FDA, the EPA and the FTC. With these government implementations to ensure a healthy business economy, this policy deserves a high score, but the low U.S. tariffs allow for many imports at lower prices effectively causing American business to outsource their production. This outsourcing takes money out of the United States’ overall GDP.
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