United State of America - Economic analysis of government policies, investment climate and political risk.

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ECONOMIC POLICY

ANALYSIS

UNITED STATES OF AMERICA: Economic Policy Analysis

This site presents an analysis of the United State of America government's economic policies compared to a revised list of 34 economic policies as prepared by Mariela Escobedo with the McKeever Institute of Economic Policy Analysis (MIEPA) in Spring 2013.

To read the analysis scroll through this site. To learn more about the background policies, click here: Introduction and Policy Recommendations

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The study is by Mariela Escobedo a native of the United States who currently [June 2013] lives in San Francisco; this study presents the United States government's economic policies as compared to the MIEPA list of policies as outlined above. The ratings herein are based on the following rating scale:

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, 2013. Used herein with permission]

To read a disclaimer about the analysis in this file, scroll to the bottom of the file.

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UNITED STATES OF AMERICA - MARIELA ESCOBEDO

UNITED STATES OF AMERICA : ECONOMIC POLICY ANALYSIS BASED ON MIEPA POLICY LIST

RATING SUMMARY

REDO ##'S FOR USA

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               4.0          12.0             15.0        80

        4               5.0          15.0             15.0       100

        5               3.0           9.0             15.0        60

        6               5.0          15.0             15.0       100

        7               5.0          15.0             15.0       100

        8               3.0           9.0             15.0        60

        9               3.5          10.5             15.0        70

        10              5.0          15.0             15.0       100

        11              2.0           6.0             15.0        40

        12              5.0          10.0             10.0       100

        13              2.5           5.0             10.0        50

        14              5.0          10.0             10.0       100

        15              2.0           6.0             10.0        40

        16              4.0           8.0             10.0        80

        17              4.0           8.0             10.0        80

        18              4.0           8.0             10.0        80

        19              2.0           4.0             10.0        40

        20              4.5           9.0             10.0        90

        21              1.0           2.0             10.0        20 

        22              1.0           2.0             10.0        20

        23              5.0          10.0             10.0       100

        24              4.5           9.0             10.0        90

        25              3.0           6.0             10.0        60        

        26              4.5           9.0             10.0        90

        27              5.0          10.0             10.0       100

        28              4.5           9.0             10.0        90

        29              4.5           4.5              5.0        90 

        30              5.0           5.0              5.0       100

        31              5.0           5.0              5.0       100

        32              4.0           4.0              5.0        80

        33              5.0           5.0              5.0       100

        34              1.5           1.5              5.0        30

   TOTAL              132.0         286.5            365.0        78.5%
                      =====        ======            =====        =====

UNITED STATES OF AMERICA: INDIVIDUAL POLICIES

1. Freedom from internal control - 5.0

Citizens in the United States can move freely, by any form of transportation, throughout the country. Restrictions can be made to a citizen if they are considered dangerous to society and or themselves. With the advancements of transportation technology, business entrepreneurs can even now run their businesses completely mobile. They may also travel anywhere in the country to promote, sell or exchange ideas boosting the economy.

http://en.wikipedia.org/wiki/Freedom_of_movement_under_United_States_law

2. Freedom of Speech - 5.0

Protected by the First Amendment, freedom of speech allows American citizens to express their ideas, opinions and thoughts freely; although Congress has made some exceptions to this Amendment through time. By sharing ideas, opinions and thoughts, the economy benefits as new business can emerge. Business entrepreneurs and owners can express themselves when promoting their business without having to worry about being censored.

http://www.uscourts.gov/EducationalResources/ClassroomActivities/FirstAmendment/WhatDoesFreeSpeechMean.aspx

https://en.wikipedia.org/wiki/Freedom_of_speech_in_the_United_States

3. Effective, fair police force - 4.0

When compared to other countries, the United States has a very effective police force. Any citizen can contact the police and the police usually respond in a timely fashion. The police are responsible for deterring criminal activity and preventing crimes and are paid for by United States citizens by taxes. Though some police in the United States can be corrupt, the overall police force is generally fair and effective as the United States has a very high population, size and cultural diversity.

http://en.wikipedia.org/wiki/Law_enforcement_in_the_United_States

4. Private Property - 5.0

The 5th Amendment of the Constitution states, “nor 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 law protects private property here in the United States and is mentioned in the Bill of Rights. This protection of private property by the law encourages businesses, both large and small, benefiting the economy of the United States as a whole.

http://en.wikipedia.org/wiki/Fifth_Amendment_to_the_United_States_Constitution

http://www.uwec.edu/geography/Ivogeler/w270/privateproperty.htm

5. Commercial Banks - 3.0

Small business and entrepreneurs need commercial banks but since the 2008 crisis, banks lost their credibility by taking risky investments and not practicing responsible loaning to the economy, causing a recession. Since 2008, no legislation has been passed to address the issues that arose in 2008. Although interest rates are low, people are not investing because they fear of the future of the economy.

http://research.stlouisfed.org/fred2/series/BUSLOANS/

http://en.wikipedia.org/wiki/Banking_in_the_United_States http://en.wikipedia.org/wiki/Federal_Reserve_System

6. Communication Systems - 5.0

Communication systems in the United States are an important part of society. So important that 8 in 10 Americans depend on cell phones. The city of East Palo Alto, California, for example, provides free (tax paid) wireless Internet for the entire city. By 2004, three quarters of Americans had Internet in their homes. Almost every automobile in the country has access to some type of radio broadcast and 99 percent of Americans have at least one television in their home.

http://www.nbcnews.com/technology/technolog/8-10-americans-depend-cellphones-121536, http://en.wikipedia.org/wiki/Internet_in_the_United_States, http://www.statisticbrain.com/television-watching-statistics/

7. Transportation - 5.0

People have access to and can easily reach all parts of the country. President Eisenhower created the Interstate Freeway and Highway system, connecting the major cities and markets of the United States by road allowing for the exchange of goods. Additionally, railroads span across the United States in order to transport both goods and people. Every major city in the United States has an airport and ports if they are by water.

http://en.wikipedia.org/wiki/Interstate_Highway_System, http://listosaur.com/miscellaneous/top-10-busiest-ports-in-the-united-states.html

8. Education- 3.0

Education is provided in the United States, but is becoming more expensive every year. As both Federal and State becoming more in debt, education is not being categorized as high importance when it comes to funding. In 2011, 19 states cut funding of education by more than five percent, 37 states cutting funding overall. Only 30 percent of Americans over the age of 25 have a bachelors degree, secondary education degree, or higher, when compared to 55 percent of Canadians have bachelor degrees.

http://www.huffingtonpost.com/2011/10/07/k-12-education-funding-mo_n_1000396.html, http://www.insidehighered.com/news/2009/11/06/ashe

9. Social Mobility- 3.5

The United States is founded on the idea of capitalism. Anyone in the United States can have any career they want, may start their own business, though some may have to put in more work than others to obtain the career or income of their choice. Those that are born into wealth, of course, have an advantage but that does not take away from the social mobility of the rest of the country. Education is available to everyone, though the fairness of education to income correlation lacks in the United States. Unfortunately, the income disparity is too big. One percent of the population holds most of the nations wealth.

http://en.wikipedia.org/wiki/Educational_attainment_in_the_United_States, http://www.census.gov/newsroom/releases/archives/education/cb12-33.html

10. Freedom from Outside Control 5.0

A United States citizen must obey the laws of the United States within its jurisdiction. Additionally, a non-United States citizen must obey the laws of the United States while in its jurisdiction. A United States citizen is not required to abide by the laws of the United States if they are not within its jurisdiction. The laws may apply for a United States citizen outside of the United States jurisdiction if the citizen is seen or considered as a major threat (terrorist). If one is in the United States jurisdiction, an outside country cannot enforce its law without the United States permission.

http://en.wikipedia.org/wiki/Federal_jurisdiction_%28United_States%29, http://www.uscourts.gov/FederalCourts/UnderstandingtheFederalCourts/Jurisdiction.aspx

11. Protection of Domestic Enterprises 2.0

The United States is part of the Free Trade Agreement, which allows countries which are part of the agreement, to trade freely eliminating tariffs, import quotas, and preferences on the majority of the goods traded. The United States has tariffs on some goods but not all, allowing countries that have either a greater supply of the goods, produced at a cheaper cost, imported into the United States, resulting in negative effects on the majority of the country, while seen as benefits for a small few. The United States recorded a trade deficit of 43 Million U.S. Dollars in February 2013.

http://www.tradingeconomics.com/united-states/balance-of-trade, http://en.wikipedia.org/wiki/Free_trade_agreements

12. Foreign Currency Transactions 5.0

In the United States, the only currency allowed to be used within the domestic economy is United States Dollar. International currencies must be converted to the equivalent of the United States Dollar if currencies from other countries want to be used within the United States. This allows for a single currency within the United States and its economy.

http://en.wikipedia.org/wiki/Monetary_policy_of_the_United_States, http://money.cnn.com/data/currencies/

13. Border Control 2.5

The United States has two major natural barriers on the Eastern and the Western borders of the country, the Atlantic Ocean and the Pacific Ocean. This allows for easy monitoring of these borders as the only way in and out is by aircraft or sea vessel. Canada, a G10 country, is located to the North and Mexico, considerably poorer than the United States, is located on the Southern border. These borders are much more difficult to monitor illegal immigration and smuggling as people can easily travel by vehicle or even by foot, which is much less detectable. As the world’s resources begin to become scarcer, more immigrants will try to find refuge within the United States, by illegally entering the country.

http://www.dhs.gov/crossing-us-borders, http://en.wikipedia.org/wiki/United_States_Border_Patrol

14. Currency 5.0

The United States Dollar is the official currency of the United States and its oversea territories and was included in the Constitution in Section Nine of Article One. The United States has always used the U.S. Dollar, encouraging commerce within the country and with other nations, as the U.S. Dollar is dominant in value when compared to currencies of other countries. As the United States dollar has not changed since the founding of the United States, the economics of the past can be compared to that of the present and allow the government to make predictions on the future economy.

http://en.wikipedia.org/wiki/United_States_dollar, http://useconomy.about.com/od/tradepolicy/p/Dollar_Value.htm

15. Cultural, language homogeneity 2.0

The United States has always been the land of opportunity and the largest magnet of immigrants. We have the most diverse country anywhere. In 2010, the Census Bureau estimated 72% of the population was white,16% Hispanic,12% black, and 4.5% Asian. However, 31 Million people are undocumented which leaves the gap between the majorities a lot smaller. We share the same goal of having a better life but as far as sharing beliefs, morality, and customs we lack. English is still the dominant language. We have become more able to comply with differences and learned acceptance but as far as being on the same page we still have some work to do.

http://en.wikipedia.org/wiki/Immigration_to_the_United_States

http://quickfacts.census.gov/qfd/states/00000.html

16. Political Effectiveness 4.0

The United States responds very well and quickly to natural disaster and terrorism compared to other countries. We are not perfect but natural disasters can’t always be predicted. FEMA (Federal Emergency Management Agency) was created to respond and give aid to natural disasters. People have died in past disasters due to lack of aid, such as Katrina where about 1,500 died of failed aid. However, rebuilding starts fairly quickly. After the 9/11 attacks the Department of Homeland Security was created immediately to defend against terrorist attacks.

http://en.wikipedia.org/wiki/Homeland_security

http://en.wikipedia.org/wiki/FEMA

http://en.wikipedia.org/wiki/Hurricane_Katrina

17. Institutional Stability 4.0

The U.S government is divided into separate branches in order to maintain a checks and balances system to help create a stable system. Although our country runs on the constitution which is very stable and does not change too frequently. The constitution is the oldest written constitution in existence and the process to change it is a possible but not one to happen too quickly, or too easily

http://en.wikipedia.org/wiki/United_states_constitution

18. Honest Government 4.0

According to the Corruption Perceptions Index of 2011 we are ranked 7.1/10 with only about 10 countries with slightly higher scores. Corruption happens everywhere, there is no 100% honest government and although we face a lot of corruption problems within our country compared to the rest of the world we receive a higher score.

http://cpi.transparency.org/cpi2011/results/

19. Common Laws 2.0

The justice system is fair when it comes to the laws that apply to everyone, we all live under the same general laws. However, the way they are enforced is not the same for everyone. If one is to break a law the amount of money you have can greatly impact the outcome of your trial, such as how much time you have to do in jail, fee you have to pay, or whether your guilty at all. Also, in business going up against a bigger company or corporation in any kind of dispute or lawsuit is unfair. Bigger corporations have more money therefore have a greater chance of winning any case.

http://en.wikipedia.org/wiki/Criminal_justice

20. Central Bank- 4.5

In the U.S have the Federal Reserve, which is in charge of keeping banks in check. It acts independently from the government thus receiving a high score. It has its own structure of appointed officials with terms, and they help regulate the flow of money in the country, pull banks from bankruptcy, and stabilize times of crisis.

http://en.wikipedia.org/wiki/Federal_Reserve_System

21. Domestic Budget Management- 1.0

The U.S government always spends more than it collects in taxes even when they raise them. The goal is to collect more than is spent, which is the opposite in our country. The past three years have shown increase of spending by 10-12%. In 2011 6.1 trillion was spent in expenditures while only 4.9 trillion was generated in revenue.

http://en.wikipedia.org/wiki/United_States_federal_budget

22. Government Debt- 1.0

The debt in 2012 was 15.7 trillion. Real GDP for the same year was 15.1, meaning that our national debt is over 100% giving the U.S a low score on debt. Also, 2/3 of the debt is in it’s own citizens. Our debt continues to grow year by year which threatens the possibility to climb out of it.

http://en.wikipedia.org/wiki/United_States_national_debt

23.Economic Statistics- 5.0

The United States has plenty of resources available to help people with economic statistics. The Internet provides a countless number of articles, websites, and blogs where information is discussed and accessible to everyone. Although not everything on the Internet may be reliable, there are government organizations such as the BEA (Bureau of Economic Analysis), which provides information on GDP, and the ESA (Economic Statistics Administration).

http://en.wikipedia.org/wiki/Bureau_of_Economic_Analysis

24. Protection of Public Health and Safety- 4.5

The U.S gets a high score for protection of public health and safety because it has a number of organizations aimed to keep it healthy and safe. The Center of Disease Control studies sicknesses, viruses, and viral harm that can be caused or spread and they aim to help maintain any outbreaks or threats to our country. Environment Protection Agency helps monitor pollution in air and water. Our infant mortality rate in 2012 was 6 to every 1,000, which is moderate compared to other countries. Tuberculosis rates are 3.5 to 1,000 which is among the best compared to other countries

http://www.phac-aspc.gc.ca/tbpc-latb/itir-eng.php

http://en.wikipedia.org/wiki/List_of_countries_by_infant_mortality_rate

25. High Wage Policies - 3.0

The Fair Labor Standards act enforces a federal minimum wage requirement of 7.25 dollars per hour. States are also allowed to enforce their own minimum wage as well as cities. California minimum wage is 8.00 dollars per hour and San Francisco 10.25. Although these laws are enforced to ensure that people are not under paid the cost of living to minimum wage ratio is still nearly impossible to live on solemnly without government assistance. Poverty in the United States was at 16% in 2010 with the percentage staying steady. Government does provide food stamps, medical, and financial aid for school if you are in need, but it is not enough to buy anything but the necessary. Obama is proposing to raise federal minimum wage within the next 3 years to 9.00 an hour, but how much this will help is yet unknown.

http://en.wikipedia.org/wiki/Poverty_in_the_United_States

26. Environmental Protection – 4.5

The U.S does very well in environmental protection. The EPA (Environmental Protection Agency) was established in 1970 to protect air, water, land, endangered species, and hazardous waste. They have 46 acts in present day to defend the environment in these 5 departments. For example the Air quality act targets ozone protection, fuel standards, air quality, and even noise control. These regulations are to be met by businesses and fines are due if they choose to not comply. However the lack in environmental health exposure and most of the time cover up big issues in the media, where there is much room for improvement.

http://en.wikipedia.org/wiki/EPA

http://en.wikipedia.org/wiki/Clean_Air_Act_(United_States)

27. Strong Army – 5.0

The United States spends more on military than any other country in the world. Roughly 700 billion was spent in 2011, and 1 trillion in 2012, with intentions of increasing. We are stationed in 150 countries and part of NATO, which has us in alliance with 28 other countries. Total spending only accounts for 16% of our government spending which is less than 1/3 thus it gets a high score.

http://en.wikipedia.org/wiki/Military_budget_of_the_United_States

http://www.usgovernmentspending.com

28. Foreign trade Impact – 4.5

The GDP for the United States in 2012 was about 15.5 trillion dollars. Imports were at 2.1 trillion and exports at 2.7 trillion for a total of 4.8 trillion. Making foreign trade percentage of GDP about 31%. The United States currently comes very close to hitting the mark at where we should be for total foreign imports and exports at the moment.

http://www.census.gov/indicator/www/ustrade.html

29. Management of foreign currency budget – 4.5

In 2012 Exports totaled 2.7 trillion and imports 2.1 trillion creating a negative balance of 600 billion, which equals out to about 4% of the overall GDP for the year. Imports have gradually been rising above exports. The past 3 years have left us with negative numbers adding to our national deficit each year.

http://www.census.gov/indicator/www/ustrade.html

30. Layers of collective action - 5.0

Our country is a democratic country that acts on federalism where no one person holds ultimate power. Big federal decisions are decided through congress and the House of Representatives which all consist of members from each state. Apart from that states have their own governments where their own laws and rules can be enforced or created. The layers of collective action are in abundance from federal government to local school boards or neighborhood watch. We tend to view ourselves as a pluralistic country where society has the ability to form interest groups and hold power through organization.

http://en.wikipedia.org/wiki/Federalism

31. Pro-business climate - 5.0

American government thrives and was founded on capitalism and the idea of being able to start from the bottom and make your way to the top has maintained as the American dream. The United States is still seen as the land of opportunity, where capitalism gives everyone a chance. CEO's of big corporations are now our countries top 1% where they get paid far more than any CEO in any other country. Although this has created income disparity in our nation and the chances of making it to the top are not as great, top business owners in America hold all the power and glory, which makes it a very pro-business country.

http://www.verisi.com/resources/us-ceo-compensation.htm

32. Government enterprises - 4.0

Most government enterprises are made to improve the well being of society as a whole such as public transportation, or postal service. Although they allow for lower pricing and higher competition for opposing businesses in the home country they do not rely completely on the government to stay afloat. Unlike a non-profit organization government enterprises are run on profit, budget cuts, and lay offs will be made if money is being lost. For example the US Postal Service this last year closed its doors on Sundays to save an average of 1.9 billion, on Dec 2011 they proposed to close about half of their processing centers and lay off 28,000 people. Its GDP growth was 2.5% last year, and has been steady since 2002.

http://en.wikipedia.org/wiki/United_States_Postal_Service#Revenue_decline_and_planned_cuts

33. International security agreements - 5.0

The United States has one of the strongest militaries in the world. We are stationed in 150 countries outside of our own. We also have the world's largest spending budget of about 683 billion this past year, with intentions of increasing it. Risk in the home country is very low with our own efforts alone. If that is still not enough we are also part of NATO or North Atlantic Treaty Organization with 28 other countries stating that any attack on us is an attack on all these countries as well.

http://en.wikipedia.org/wiki/United_States_Armed_Forces#Overseas

34. Protection of domestic enterprises from government mandated costs - 1.5

Government enforcement on labor and environmental regulations such as the OSHA (Occupational Safety and Health Administration) which helps ensure the safety of workers on the job, and the EPA (Environmental Protection Agency) which ensures that companies aren’t damaging the surrounding environment make it difficult for big business to turn a profit. Companies are turned to look at countries without these regulations to establish their factories or processing centers.

http://www.downsizinggovernment.org/commerce/ita

DISCLAIMER

All the information and conclusions in each country analysis are solely the responsibility of the individual student and have not been verified, corrected, checked for copyright infringement or evaluated in any way by MIEPA or Mike P. McKeever. You are solely responsible for the results of any use you make of the information and conclusions in these studies. Use them at your own risk as interesting supplemental information only instead of seasoned judgements about the policy factors contained herein. Each student has granted permission for his or her work to be displayed here under his or her own name or wishes to remain anonymous and have either created a pen name or used no name at all; if you wish to contact them for any reason, forward your request to MIEPA and the student will be notified of your interest.

To learn more about other countries, click to other files here:

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CONTENTS OF SITE

Return to MIEPA's Home Page list of country studies

Introduction and Policy Recommendations

Winning Essays: There Are Alternatives Project (TAA)

Essay: Balanced Trade: Toward the Future of Economics

Moral Economics

McKEEVER INSTITUTE of ECONOMIC POLICY ANALYSIS

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