This site presents four analyses of the United States government's economic policies compared to a list of 35 economic policies as prepared by students Daniela Bejarano, Melissa Headrick, Caleb Plakun and Greer Whitaker with the Mike P. McKeever Institute of Economic Policy Analysis (MIEPA). These studies were written in December of 2018. To read the analyses scroll through this site. To learn more about the background policies, click here
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Return to MIEPA's Home PageThe first study is by Specialist Daniela Bejarano and is presented immediately below. To read the studies by Melissa Headrick, Caleb Plakun and Greer Whitaker, scroll though the first study.
This study presents a detailed study of the economic policies of the United States, as written by Specialist Daniela Bejarno. 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 - DANIELA BEJARNO 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 3.0 9.0 15.0 60 4 3.0 9.0 15.0 60 5 4.5 13.5 15.0 90 6 5.0 15.0 15.0 100 7 5.0 15.0 15.0 100 8 4.0 12.0 15.0 80 9 2.0 6.0 15.0 40 10 5.0 15.0 15.0 100 11 5.0 15.0 15.0 100 12 3.5 7.0 10.0 70 13 5.0 10.0 10.0 100 14 3.0 6.0 10.0 60 15 5.0 10.0 10.0 100 16 2.0 4.0 10.0 40 17 3.5 7.0 10.0 70 18 5.0 10.0 10.0 100 19 1.0 2.0 10.0 20 20 0.1 0.2 10.0 2 21 4.5 9.0 10.0 90 22 2.0 4.0 10.0 40 23 1.0 2.0 10.0 20 24 4.6 9.2 10.0 92 25 3.0 6.0 10.0 60 26 1.0 2.0 10.0 20 27 4.0 8.0 10.0 80 28 5.0 10.0 10.0 100 29 4.5 4.5 5.0 90 30 3.5 3.5 5.0 70 31 5.0 5.0 5.0 100 32 5.0 5.0 5.0 100 33 3.5 3.5 5.0 70 34 5.0 5.0 5.0 100 35 2.0 2.0 5.0 40 TOTAL 128.2 274.4 370.0 74.1% ===== ====== ===== =====
INDIVIDUAL POLICIES - DANIELA BEJARNO
1. Freedom from internal control- 5.0
The right freedom of movement states, “In Article 12 of the International Covenant on Civil and Political Rights: Everyone lawfully within the territory of a State shall, within that territory, have the right to liberty of movement and freedom to choose his residence. Also, everyone shall be free to leave any country, including his own”.
2. Freedom of speech- 5.0
The freedom of speech states the right to express any opinions without censorship or restraint. Therefore, New ideas and innovation are necessary for sustaining economic growth, and there's a large body of evidence that emphasizes the exchange of ideas as an important component of an innovative economy.
The United States has been especially successful at fostering innovation and growth in the technology sector. Facebook's market capitalization alone is twice the size of all the large European tech giants combined. There's a good reason to believe that America's economic prosperity in this rapidly changing sector is due to its commitment to the free exchange of ideas.
3. Effective, fair police force- 3.0
The United States such a global outlier it’s about race, poverty and sky-high levels of violence. America has a problem with racist police violence. Young black men were nine times more likely than other Americans to be killed by police officers.
Police killings of African-Americans mostly young, mostly male, and many unarmed have sparked local, national, and global protests, court cases, and some overdue national soul-searching. In the United States, there are somewhere between 88 and 112 guns per 100 people. America has a violence problem, and a racism problem, and a policing problem
4. Private property- 3.0
The Fifth Amendment protects the right to private property in two ways. First, it states that a person may not be deprived of property by the government without “due process of law,” or fair procedures. In addition, it sets limits on the traditional practice of eminent domain, such as when the government takes private property to build a public road.
In the United States, a private property is guaranteed by the government. The court system is a subject and is lax in enforcing contracts. Corruption is possible but rare, and expropriation is unlikely.
5. Commercial banks- 4.5
For a small business can be easy to access to lending, leasing, insurance and payroll management through one institution may offset any additional costs associated by using the bank as an intermediary.
In the United States, studies show about 82% of commercial banking can help your business by making it easier to manage day-to-day financial tasks. An established commercial account with a bank will make it easier to borrow money when you grow your business.
6. Communication systems- 5.0
Technology, Media and Telecommunications Practices as part of a knowledge partnership with the internet, offers the first quantitative assessment of the impact of the Internet on GDP and growth, while also considering the most relevant tools governments and businesses can use to get the most benefit from the digital transformation
The Internet’s impact on global growth is rising rapidly. The Internet accounted for 21 percent of GDP growth over the last five years among the developed countries MGI studied, a sharp acceleration from the 10 percent contribution over 15 years. The Internet is also a catalyst for job creation. Among 4,800 small and medium-size enterprises surveyed, the Internet created 2.6 jobs for each lost to technology-related efficiencies.
The economic and social complexion of life in the United States mirrors the country’s extraordinary mobility. Most trips in metropolitan areas are made by automobile, the public transit and rail commuter lines play an important role in the most populous cities, with the majority of home-to-work commuters traveling by public carriers in such cities as New York City, Chicago, Philadelphia, and Boston.
Navigable waterways are extensive and center upon the Mississippi River system in the country’s interior, system in the north, and the Gulf Coast waterways along the Gulf of Mexico. Also, Air traffic has experienced spectacular growth in the United States since the mid-20th century.
Many American cities where you can live without relying on a personal car. Nowadays any city can take public transportation usually a system of buses some of the time, but few areas offer a complex network of trains, Bart, Muni, bicycle lane, buses, cable cars, and two subways systems.
8. Education- 4.0
The number of students projected to attend American colleges and universities in fall 2018 is 19.9 million, which is higher than the enrollment of 15.3 million students in fall 200, but lower than the enrollment peak of 21.0 million in fall 2010. Total enrollment is expected to increase between fall 2018 and fall 2027 to 20.5 million. 30 years ago, America was the leader in quantity and quality of high school diplomas. Today, our nation is ranked 36th in the world.
In 2017, the unemployment rate for 25 to 34-year-olds with a bachelor ‘s or higher degree 2.5 % was lower than the rate for young adults with some college 4.4%, those who had completed high school (7.2 percent), and those who had not completed high school 13.2 %.
9. Social Mobility- 2.0
Studies show how challenging is to move up in America. Those who make very little money in their first jobs will probably still be making very little decades later, and those who start off making middle-class wages have similarly limited paths. Only those who start out at the top are likely to continue making good money throughout their working lives.
The chance that someone starting in the bottom 10% would move above the 40th percentile decreased by 16%. The chance that someone starting in the middle of the earnings distribution would reach one of the top two earnings deciles decreased by 20%. Yet people who started in the seventh decile are 12% more likely to end up in the fifth or sixth decile drop-in earnings than they used to be.
10. Share of All Jobs in Small Businesses- 5.0
According to the Bureau of Labor Statistics, since the end of the Great Recession, small businesses have created 62 percent of all net new private-sector jobs. Among those jobs, 66 percent were created by existing businesses, while 34 percent were generated through new establishments adjusted for establishment closings and job losses.
As President Barack Obama said when opening last year’s Global Entrepreneurship Summit in Kenya, “Entrepreneurship creates new jobs and new businesses, new ways to deliver basic services, new ways of seeing the world it’s the spark of prosperity.”
11. Freedom from outside control- 5.0
The Declaration of Independence gave birth to many other freedoms in the United States of America that may never have even been intended. The document is symbolic of American democracy and one of the free charters of freedom.
12. Protection of Domestic Enterprises- 3.5
The United States has free trade agreements in effect with 20 countries.North American Free Trade Agreement and the Dominican Republic-Central America-United States Free Trade Agreement, are multilateral agreements among several parties.
Although the deficit climbed $113 billion from fiscal 2017, also to top $1 trillion in 2019, nearly matching the $1.1trillion imbalance from 2012. This free trade in effect with 20 countries it also can increases prosperity for Americans and the citizens of all participating nations by allowing consumers to buy more, better-quality products at lower costs. It drives economic growth, enhanced efficiency, increased innovation, and the greater fairness that accompanies a rules-based system. These benefits increase as overall trade exports and imports increases.
13. Foreign currency transactions- 5.0
The United States dollar as the principal international reserve currency. The United States received an “exorbitant privilege” due to the greenback serving as the basis for much of international financial transactions. Foreign travelers are expected to change it currency because the purpose of a reserve currency is to help smooth international transactions. More companies and individuals using the dollar means more transactions denominated in dollars, which provides more liquidity for this currency.
14. Border control- 3.0
U.S. Customs and Border Protection stated that as June 6 show that for the third straight month, apprehensions in May that is, the number of migrant arrests of those illegally crossing the border between ports of entry increased 178 % over the same month a year earlier.
In 2016, more than 42,000 people in the U.S. died from opioid overdoses more than any other year on record. On average the number continues to rise today the lives of 91 Americans every single day. President Donald Trump declared the opioid crisis a national health emergency, pledging the full support of the federal government in this fight. Part of that support starts right at America’s borders and ports of entry.
15. Currency- 5.0
The U.S. dollar has enjoyed status as the leading currency for decades. It makes up 64% of all known central bank foreign exchange reserves. That makes it the de facto global currency, even though it doesn't hold an official title. Around $580 billion in U.S. bills are used outside the country. That's 65 percent of all dollars. That includes 75 percent of $100 bills, 55 percent of $50 bills, and 60 percent of $20 bills.
16. Cultural, language homogeneity- 2.0
The United States as a country yet to achieve racial equality. Roughly 61% of studies show that our country needs to continue making changes for blacks to have equal rights with whites, while 30% shows we have made the changes needed to bring about equality.
After trumps elections, whites stated that they are more likely to point to individual prejudice rather than institutional racism as the bigger problem when it comes to discrimination against black people today 70% citing individual prejudice vs. 19% saying institutional racism. Blacks are more evenly divided: 48% say individual prejudice is the bigger problem, while 40% point to discrimination that is built into the country’s laws and institutions.
17. Political effectiveness- 3.5
From hurricanes and tsunamis to terrorist attacks and oil spills, myriad natural and man-made catastrophes around the world prompt U.S. government aid. For example, President Barack Obama issued emergency declarations for nine states and the District of Columbia days before Hurricane Sandy struck the East Coast in 2011; seven of these were reclassified as major disasters after the storm made landfall. Emergency declarations, which can unlock up to $5 million in aid, run the gamut from the Flint, Michigan, water crisis to the Boston Marathon bombing to disease outbreaks.
18. Institutional government- 5.0
America’s constitution, founded in 1787, states “This document was created to improve our government, establish justice, make relations within the country peaceful, protect ourselves, make living conditions good, achieve all the benefits of freedom for ourselves and our children”.
19. Honest government -1.0
The United States faces a wide range of domestic challenges related to the abuse of entrusted power for private gain because key issues include the influence of wealthy individuals over government to abuse the financial system by corrupts.
Nearly six in ten people now say that the level of corruption has risen in the past twelve months, up from around a third who said the same in January 2016. The United States government and some key institutions of power still have a long way to go to win back citizens’ trust.
20. Common Laws- 0.1
Whites are far less likely than blacks and black people in the country as a whole and in their communities are treated less fairly than whites in dealing with the police, in the courts, when voting, in the workplace, when applying for a loan or mortgage, and in stores or restaurants.
The rates at which African Americans(blacks) both commit and are the victim of homicide is about six to eight times higher than that of white Americans.The overrepresentation of some minorities in the criminal justice system can be explained by socioeconomic factors as well as racial discrimination by law enforcement and the judicial system.
21. Central bank- 4.5
The United States central banking system is known as the Federal Reserve Bank and it endeavors to keep the financial structure of the U.S. stable. Central banking systems are an important part of the economy responsible for regulating the money supply, controlling interest rates and looking after the overall banking system of the country. The federal bank is an independent government and is set up like a private corporation since monetary policy decisions do not have to be approved by the President because is unrestricted of politics.
22. Domestic budget management- 2.0
The federal budget deficit has surged to $779 billion in fiscal 2018, its highest level in six years. `The deficit climbed $113 billion from fiscal 2017, also to top $1 trillion in 2019, nearly matching the $1.1trillion imbalance from 2012.
23. Government debt- 1.0
The United States has built up when the government spends more than it collects through tax revenues and fees collected on visas, air fares and telecommunications, among other funding streams. The money is used to run all aspects of the government from education to health care and the military and to pay entitlements to various parties, such as retirees, veterans and others.
As of March 2017, the United States debt is about $19.9 trillion and is constantly changing. The amount changes to $61,365 for every person living in the U.S and $158,326 for every household. About 106% of the U.S. gross domestic product 560 percent of annual federal revenues. Running a deficit for a long time can be a bad thing for the country because the interest on borrowed money continues to accrue, exacerbating the long-term debt.
24. Economic statistics- 4.6
The economic censuses and surveys constitute the major body of facts about the structure and functioning of the Nation's economy. They provide information that is essential to government, business, industry, academia, and the general public. Businesses use Census data to make decisions about where to locate, how much to produce, and to compare their performance to other businesses in their industry or community.
Local communities use Economic Census results to attract new businesses, assess the economic health of their localities, understand the characteristics of their business base, and compare their community to other geographical areas. Today, the survey guides the geographic distribution of over $400 billions of federal funding and is a vital component of our nation’s statistical system.
25. Protection of public health and safety 3.0
In 2017, a total of 9,105 TB cases were reported in the United States. This represents a 1.6% decrease from 2016.TB case counts were highest in California, Texas, New York (including New York City), and Florida. These four states accounted for just under half of the total cases in the United States. The majority of TB patients (65.1%) received treatment by directly observed therapy (DOT) only, and 28.5% of patients received a combination of DOT and self-administered therapy. These numbers have remained stable since 2011.
The infant mortality rate has fallen by 15 percent in the past 10 years. Over the past decade, the overall infant mortality rate in the United States has improved, declining 15 percent from 6.86 infant deaths per 1,000 live births in 200 a recent high to 5.82 in 2014.
26. High wage policies 1.0
United States minimum wage for all industries is between $10.50/hour and $15.00/hour which for an average single working person can be challenging to afford costfor housing, health care and education. The average household needs to make at least six figures to comfortably afford the average fair market rent for a two-bedroom apartment in America. The study finds that numbers are even worse for low-income households, defined as households earning less than the poverty level or 30% of the area’s average income. Four-person households making an annual $26,420 or less can only afford to spend $660 a month on rent, while the national average fair market rent for a one-bedroom rental is $931.
27.Environmental Protection 4.0
According to the National Conference of State Legislatures which favors the Clean Air Act amendments of 1990 that will prevent over 230,00 early deaths. Also, programs are projected to result in a net improvement in U.S. economic growth and the economic welfare of American households. The act offers to have better quality of life that is a good economic investment because more people will experience longer lives and better worker productivity. From 1970 to 2017, aggregate national emissions of the six common pollutants alone dropped an average of 73 percent while gross domestic product grew by 324 percent. The emissions reductions have led to dramatic improvements in the quality of the air that we breathe.
28. Strong army- 5.0
The United States military spending is $598.5 billion, which takes 54% of the total discretionary spending. This reassures the protection of our nation’s citizens and safety, which increases the stability for American citizens territory and threats. Also having a strong military better insurance that foreign nations honor their commitments and agreements with the United States.
29. Foreign trade impact- 4.5
Although global trade grew 10.5, exports create jobs and boost economic growth. In 2016, the percentage of U.S. imports of the GDP amounted to 14.69%and export as a percentage of GDP is 11.89%. United States total foreign account is 26.58% which is close to the goal of 33%. International trade increases economic growth and lifts the wages of our citizens. It is also one of the important sources of revenue for a developing country by allowing businesses to buy and sell in foreign markets.
30. Management of foreign currency budget- 3.5
In 2016, U.S. exports were $2.2 trillion, and imports were $2.7 trillion. The trade deficit was approximately $500 billion. Although the US deficit has been growing for the past few decades, currently in the United States imported $54.0 billion more than it exported. The United States has a large economy that would slowly balance.
31.Layers of collective action- 5.0
Americans have the right to participate and influence a system of a government in which the citizens of a country ruled by majority vote. Since the United States doesn’t impose to limit citizens and gives the opportunity to let Americans decide on policymaking by having separate federal and state laws. Also having Legislative, Judicial, and Executive branches as opposed to a dictatorship. Therefore, the freedom for people to decide, the United States receives a higher score.
32. Pro-business climate- 5.0
The United States holds one the highest value on business and consumer market with nearly $13 trillion in goods and services. Also, the opportunity of business growth for economic advancement as compared with all other nations.
33. Government Enterprises- 3.5
The government the United States helps subsidy business and individuals to help the economic growth. Even though with government subsidies, some businesses maybe be affected, it also helps social goods or an economy policy by providing financial support. The United States has gone towards four industries: agriculture, financial institutions, oil companies, and utility companies.
34. International security agreements- 5.0
The international growth of going global as an importer-exporter is assured to increase the develop freedom to expand the business because of the United States mutual defense treaties.
35. Protection of domestic enterprises from government mandated costs- 2.0
Small business can help the economy by creating about 2.5 million jobs. Due to an increase of federal regulations by 850%, it has affected the growth of small businesses because of the imposed cost disadvantages by the government. Although all employees should have basic rights in the workplace and these regulations can prevent unexpected incidents, these regulations can harm development to America’s small business.
34. International security agreements- 5.0
The international growth of going global as an importer-exporter isassured to increase the develop freedom to expand business because of the United States mutual defense treaties.
35. Protection of domestic enterprises from government mandated costs- 2.0
Small business can help the economy by creating about 2.5 million jobs. Due to an increase of federalregulations by 850%,it has affected the growth of small businesses because of the imposed cost disadvantages by the government.Although all employees should have basic rights in the workplace and these regulations can prevent from unexpected incidents, these regulations can harm development to America’s small business.
This study presents a detailed study of the economic policies of the United States, as written by Specialist Melissa Headrick. 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 - MELISSA HEADRICK 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 2.0 6.0 15.0 40 4 4.5 13.5 15.0 90 5 4.5 13.5 15.0 90 6 4.5 13.5 15.0 90 7 5.0 15.0 15.0 100 8 3.5 10.5 15.0 70 9 2.0 6.0 15.0 40 10 5.0 15.0 15.0 100 11 5.0 15.0 15.0 100 12 2.0 4.0 10.0 40 13 4.8 9.6 10.0 96 14 3.0 6.0 10.0 60 15 4.8 9.6 10.0 96 16 0.5 1.0 10.0 10 17 2.0 4.0 10.0 40 18 4.5 9.0 10.0 90 19 3.5 7.0 10.0 70 20 1.0 2.0 10.0 20 21 4.5 9.0 10.0 90 22 1.5 3.0 10.0 30 23 1.2 2.4 10.0 24 24 3.5 7.0 10.0 70 25 3.5 7.0 10.0 70 26 1.0 2.0 10.0 20 27 4.0 8.0 10.0 80 28 5.0 10.0 10.0 100 29 4.0 4.0 5.0 80 30 3.0 3.0 5.0 60 31 5.0 5.0 5.0 100 32 5.0 5.0 5.0 100 33 3.0 3.0 5.0 60 34 5.0 5.0 5.0 100 35 2.0 2.0 5.0 40 TOTAL 123.3 265.6 370.0 71.8% ===== ====== ===== =====
INDIVIDUAL POLICIES - MELISSA HEADRICK
1. Internal Control - 5.0
Movement controls are basically unlimited for non-criminal Americans and even foreigners with permission to be in the US. The concept of free movement was included in the original Articles of Confederation (article 4) but was not included in the Constitution. Later supreme court decisions such as the US vs. Wheeler interpreted the "Privileges and Immunities" clause of the US constitution as including freedom of movement (and that States could not threaten to tax or fine a person to prevent his leaving). Other Supreme Court decisions limit the government's ability to restrict rights, such as Murdoch v. Pennsylvania “No state shall convert a liberty into a license, and charge a fee therefore.” While there are exceptions and workarounds, generally Americans and others have considerable freedom to engage in any legal activity, including most wealth creation.
2. Freedom of speech - 5.0
The united states has a long tradition of guarding the speech of private individuals from government interference. The first amendment of the US constitution is the key and explicit limit on government-initiated restriction on speech. This has been interpreted as a freedom to critique, give opinion, and these all form part of necessary communication in a free market - customers must be free to not only reject and prefer certain products, but to communicate to each other. The US also provides limitations to libel and slander protections, on the basis of truthfulness of the claim.
3. Effective, fair police force- 2.0
The United States police force is by no means fair across all members of the American community, nor is it perceived to be that way by minorities. Black citizens are 4 times more likely to be incarcerated, and about 2.75 times more likely to be met with deadly force. Families are being separated and deported and police often stop people for not “looking” American to check for papers. This is extremely discouraging for minorities in their day to day life, and especially in regards to starting a business. The majority of the population is in the United States is white, and likely views the police force as fair because they do not endure the same unjust treatment.
4. Private Property - 4.5
The US has a long history of recognizing private property rights, not only inheriting British Common Law going so far as to include some protections in the Constitution, via the 5th amendment's "Takings Clause" which states "...nor shall private property be taken for public use, without just compensation" and the "due process" clause. This both labels the concept and limits Government action against it. The 14th Amendment further extended the Takings clause to the various States. Other clauses and amendments put other restrictions in place on government overriding of property rights. Recently the rise of Civil Asset Forfeiture seems to have pushed the needle against private property protections, by criminalizing the property itself, not the owner, however, this is controversial and some States have put statutory limits on the practice.
5. Commercial banks- 4.5
Currently the Federal Reserve is responsible for implementing monetary policy and to maintain economic stability throughout the country. Due to the current set up of the Federal Reserve Board, the chances of outside forces manipulating the bank or the economy are very low. Commercial banks are important to the economy because their lending is the backbone to supporting small businesses. When people in the economy receive their paychecks, they put it into the bank. The bank then loans out about 70% of the money to a business who also put this money into a bank. The banks in this way also cause the multiplier effect, bringing roughly 6 times the original amount into the economy.
6. Communication systems- 4.5
The United States is one of the highest ranking in terms of internet freedom. Gaining access to the internet is possible for anyone with access to a wifi device or computer, as free wifi is offered in nearly every business, library, and school. Now with many different cell phone companies providing service throughout the United States, it is easy to connect to data almost anywhere. This allows for new tech innovations such as square (an electronic card reader that hooks directly into the phone) for businesses to use anywhere. Gaining access to other forms of communication such as newspaper, television, fax, and radio has also been made especially easy as well. Besides all forms of communication also being on the web, you can access them nearly anywhere. Newspapers are sold in every store, and radio is easily picked up. While there are still a few remote areas in the United States where cell service is patchy or cable is not an option, there is still the option of satellite.
7. Transportation- 5.0
The US government has long invested in critical transportation, from maintaining waterways, to the interstate highway system. According to the CBO, Federal, State, and Local spending on transport was $400 billion in 2014, including $95B in federal spending. Of this, $165 Billion went into highway infrastructure alone (as well as bridges, tunnels, etc.). This complex network of highways has allowed a vibrant trucking infrastructure to reach deep into the american heartland. Less populated states are still served by the interstate system as well as rail or water shipping (if near waterways). These investments facilitate over $16 Trillion of commercial goods, mail, and raw materials across all modes of transportation, domestically. Even remote states such as Hawai'i and Alaska have access to multiple modes of transport.
8. Education- 3.5
The education system in the United States is good in comparison to most of the world, however when compared to more industrialized countries, the U.S. is subpar. Of the 34 OECD countries, the US ranks 17th in math, 21st in science, and 17th in reading. Socio-economic class also plays a larger role in the US then in other countries.
In 2015, only about 90% of US Citizens ages 25-34 had finished high school or more, trailing behind Russia, Canada, Japan, Italy and Australia.
9. Social Mobility- 2.0
In the United States, upward mobility in society has been steadily decreasing since the 1940’s. Children are much less likely to attain equal or more education than their parents before them, likely because of how difficult it has become to attend and afford college.
As far as jobs go, federal minimum wage has not been raised in almost 10 years. While Trump things states should be free to “do what they need to do”,without the federal minimum wage to set the bar, some states would likely make it even lower.
10. Share of All Jobs in Small Businesses- 5.0
In the U.S., small businesses make up 48% of the private workforce, with and represented 99.7% of U.S. Businesses. The U.S. is a fantastic place for small businesses and startups to thrive, creating a bulk of the jobs in the United States.
11. Freedom from outside control - 5.0
Generally speaking, US citizens are not subject to the laws of other countries unless they are present on their territory, or have some other obligations, such as in the case of dual citizens, or where otherwise restricted by a treaty. The US government protects and defends US citizens abroad as well, through embassies and consulates which provide assistance in emergency situations, incarceration, etc. In other ways, the US government seeks to protect the business interests of US business owners, for instance, by pressuring foreign governments to adopt compatible intellectual property protections.
12. Protection of Domestic Enterprises- 2.0
The United States has a huge trade deficit that is growing every year. The deficit in 2017 was $566 billion. The goods deficit with China alone hit $375.2 billion in 2017. This affects the economy in a huge way, as it is not only taking $566 billion dollars out of the economy every year, this is more like 6 times that due to the multiplier effect. This has a huge negative impact on the economy, causing us to be way too dependent on other countries.
13. Foreign currency transactions- 4.8
While it is not illegal to accept other currencies in the U.S., because of the way the system is set up with the federal bank, it is extremely difficult to attempt to use other country currencies, as no one will accept it. Banks will exchange currency for a fee, but not accept it as typical currency. The U.S. dollar is so strong, however, it is accepted in many other countries.
This being said, the use of cryptocurrencies is on the rise. It is difficult to say where this will lead the economy.
14. Border control-3.0
It’s difficult to say just how many people and illegal goods make it into the country, as we only know about what has been stopped. A report published last by the Office of Immigration Statistics, estimates that 55 to 85 percent of attempted illegal border crossings are unsuccessful, up from 35 to 70 percent a decade ago, but there is honestly no way to know. It is possible they just got better at smuggling.
While it may be important to have strict borders, making the borders too strict is also a problem. Cities and towns near the border have been the most effected, losing many of their employees and customers. Trump proposing to build a wall between the U.S. and Mexico, and implementing the travel ban against primarily Muslim countries promoted large amounts of prejudice and racism throughout the United States. In many cases, people were stopped and checked for citizenship simply because they “looked” like they might not be American. Causing so much fear in people for their residency status, and pitting citizens against each other and police, is never beneficial to anyone or anything, even the economy.
15. Currency- 4.8
The United States dollar is so strong, that not only is it the primary currency in America, but is also widely accepted in many countries around the world because of its stability. After World War II, the developed nations decided to fix the rate of exchange for all foreign currencies to the U.S. dollar. In the early 1970’s the dollar was then untied from gold by Nixon and became the new gold standard within itself. The US also has multiple laws in place to prevent the creation of new forms of currency in the country, such as the Liberty Dollar.
Recently, we have seen a rise of a new form of currency called a “cryptocurrency” such as Bitcoin. Bitcoin self-regulates and eliminates the use of a bank. It also increases and decreases in stability depending on the economies of the main countries using it. Some question if cryptocurrencies are the way of the future, converting the entire world to one global system.
16. Cultural, language homogeneity- 0.5
While the United States is a melting pot of all different types of people, it also has a long standing history of primarily white Americans inflicting great pain and harm to others based on cultural differences, religious differences, or race, even starting at the formation of the colonies with the slaughter of the Native Americans. Even today, the few Native Americans that are left and are living on tribal land, still have issues with the American government. A recent example is the case of the brutal protest of the Dakota Access oil pipeline, which put a large oil pipeline across the drinking and living water supply for the Sioux tribe.
The United States also held about 388,000 black slaves from Africa. Segregation did not end until 1954, less than 100 years ago.
During WWII, people of Japanese origin or descent were rounded up and put into internment camps.
When the United States illegally overthrew Hawaii, they all but broke the people and their culture. Speaking their native language was banned and even punishable by law.
Even more recently, the Trump administration enforced a travel ban against 7 primarily muslim countries, causing the muslim community here in the US to panic and question their safety. It was also found that many illegal immigrant families were being round up, separated, and put into cages.
The behavior and treatment of non-white groups in the United States is absolutely sickening.
17. Political effectiveness- 2.0
The United States has not been good at handling natural disasters or terrorists attacks in the past 10 years or more. Although FEMA (Federal Emergency Management Agency) helps with some natural disasters such as the California wildfires, there is a staggering amount of natural disaster and terrorist attacks the government has seemingly turned a blind eye to, or done very little to help with, including Hurricane Katrina, the Flint Michigan water crisis, Standing Rock, the hurricane that hit Puerto Rico, and countless mass shootings.
Organizations such as the National Rifle Association spend very large amounts of money on politicians. This helps them sway the laws in their favor, and is likely the reason why there is very little gun control, making it easier for anyone to get their hands on heavy duty weapons.
18. Institutional stability- 4.5
Other than a few laws and policies shifting here and there, the United States core institutions are generally very stable. The US has been following the same constitution since 1787. Having a stable government that continuously enforces laws is important to maintaining a healthy lifestyle and economy. Without it, other potentially malicious powers may attempt to rise and control the people and resources. Although there are a few corrupt individuals in power who do not correctly inforce or follow the laws set in place, the government is stable enough to help people feel as though they have enough freedom to live and having thriving businesses rather than live in fear.
19. Honest government - 3.5
On the corruption perceptions index for 2017, the US has averaged around 75 out of a hundred, ranking number 16 out of 180 countries. Surveys show that 7 out of 10 Americans believe the government became more corrupt in 2017, and over ? of the total surveyed does not trust the police.
20. Common laws - 1.0
In 2017, the total population in the United States was about 325,719,178 people. Of those people, about 247,546,575 (or 76%) were white, and 43,320,650 (or 13.3%) were black. In federal prisons in 2017, there were about 106,805 white people in prison (or .04% of the total white population), and about 69,363 black people in prison (or about .16% of the total black population in the US). This means that African American citizens are 4 times more likely to go to prison than white citizens. The number of white people shot to death by police in 2017 was about 392 (or .000158% of the white population), and the number of black people shot to death in 2017 was about 191 (or .000441% of the black population. This shows that if you were an African American citizen in the United States, you were 2.7 times more likely to be met with deadly force, than you would be if you were a white citizen.
Sentencing seems to vary from case to case, with offenses having potential minimum and maximum sentences. This can be determined by the judge and jury of the case (and whatever mood they may be in that day). The court will often offer bail to get out of prison, which clearly favors the rich, as many of the mid to lower class citizens will not be able to afford it, or a good lawyer. Receiving tickets such as parking tickets also greatly disadvantages the poor. Rich people with more money will simply pay the ticket, where poor people may not be able to. The results of this may be steeper fines, prison time, or even having a suspended license, which could result in more prison time.
21. Central bank- 4.5
The Federal Reserve Bank is the United States central bank. The bank is controlled by the Board, which is an independent agency within the federal government. Members of the Board--now called Governors--are appointed by the President and confirmed by the Senate. 11 Governors serve 14 year terms that expire at 2-year intervals and are not linked to election cycles. The Federal Reserve Board is charged with general oversight of the 12 Reserve Banks. Because the governors each serve such long terms, it gives them time to gain a lot of knowledge and experience, however the rotation of a new governor every year provides with a consistent flow of new ideas and perspective. There is little to no political control from the government.
22. Domestic budget management - 1.5
From 2015 to 2017, the total annual tax revenue collected was $3.18 trillion, $3.50 trillion, and $3.32 trillion. The expenditure totals were $3.8 trillion, $3.9 trillion, and $4.15 trillion. The US Government spent more than total tax revenues by 19.4% in 2015, 11.4% in 2016, and 25% in 2017.
The government spending more than it has coming in is detrimental to the economy, because if the deficit must be borrowed, then the money will not be available to expand businesses. With the baby boomers generation retiring, there will be less people working and spending, and more people collecting social security. By 2020, 1 in 5 Americans will be over the age of 65.
23. Government debt - 1.2
The United States is currently in debt about 21 trillion dollars. Of that debt, about 14 trillion is owed back to its own citizens. The amount of debt the United States is in has increased by 1 trillion dollars every year since 2007, and will likely never get payed back.
In 2017, the GDP was about $19.7 trillion, the same year the debt was about $19.9 trillion. That is 99% of the countries total GDP for the year. This produces a negative effect on the economy because the debt will have to be repaid, which takes away from wealth creating activities. The United States is terrible at managing a budget and will likely never be even close to paying down all of the debt.
24. Economic statistics- 3.5
The United States Census Bureau is in charge of compiling data and statistics reflecting the people and economy here in America. While they do their best to be as accurate as possible, there are still discrepancies in the data. With technology always changing, the Bureau often changes is means of collecting data to keep up with our fast paced society. This could also created discrepancies in data as it is collected over 10 years, and may have changed multiple times throughout. If the census were to begin asking people in the survey if they are legal immigrants, illegal immigrants, or citizens, people whose answer would be “illegal immigrants” would be much less likely to be willing to fill out the form. This could allow for the current administration to use this fake information for a false narrative.
The Census Bureau claims to keep all information reported to them completely confidential in order to obtain more accurate answers on surveys, however, in 1918, the Census Bureau released individual information regarding several hundred men to the Justice Department and Selective Service system for the purpose of prosecutions for draft evasion. During World War II, the United States Census Bureau also assisted the government's Japanese American internment efforts by providing confidential neighborhood information on Japanese-Americans. The Bureau's role was denied for decades but was finally proven in 2007. It can not be trusted.
25. Protection of public health and safety- 3.5
The United States infant mortality rate for 2017 was 5.9 deaths per 1,000 live births. This is higher than all other developed countries such as Japan, at 2 deaths per 1,000 lives births, and England and Wales at 4 deaths per 1,000. This is likely due to problems with lower to middle income citizens not having access to medical care.
While the infant mortality rates were not good in comparison to other developed nations, cases of tuberculosis were significantly lower with only 2.8 cases per 100,000 people. England had 9.2 cases per 100,000 people. The CDC here in the United States has specific protocol as far as handing patients with TB and helping the disease to not spread.
26. High wage policies- 1.0
While the average single working person who was not a professional may have been able to make ends meet 50 years ago, the US economy of today is nearly impossible for all middle class, or lower than middle class working citizen, who are most likely finding themselves living paycheck to paycheck, having to do without many things, and are just scraping by.
The federal minimum wage is currently 7.25 an hour. The average cost of rent per person in the united states is about $1,100. A person making 7.25 an hour and working full time would not be able to afford all of the basic necessities of life, let alone anything extra such as education or health care. If the federal minimum wage had kept up with inflation and changes in the economy, it would have been raised to about $19.
27. Environmental protection- 4.0
With different politicians in office, it is seeming the EPA may be beginning to cut back on enforcement as of late, allowing for some pretty nasty environmental pollutants.
The US federal government established the EPA (Environmental Protection Agency) on December 2, 1970 after many concerns about the state of the environment, as well as to consolidate other governmental programs focused on environmental safety. When people are found in violation of laws, regulations, or policies set by the EPA, it is a criminal offense possibly worthy of jail time. In 2017, environmental criminals were required to pay a total of $2.98 billion in fines, restitution, and mitigation, and were sentenced to serve over 150 years in jail.
28. Strong army- 5.0
The United States has one of the largest armies in the world with 1.3 millions active duty troops, with another 865,000 or so in reserves. About 200,000 of the troops are stationed in over 170 countries making the US presence very strong internationally.
The amount spent on the military by the US in 2017 was about 596 billion dollars, dwarfing all other countries in comparison. This was still only about 16% of the countries total budget.
With such a high military budget, the US is able to afford other types of forces other countries will not have, such as planes, submarines, ships etc. The US is also one of the few countries currently holding nuclear, and has a permanent seat on the UN.
29. Foreign trade impact- 4.0
The total annual imports for 2017 amounts to $2.9 trillion. The total annual exports for 2017 amounts to $2.3 trillion. Added together for the total amount of trade is $5.2 trillion. The total GDP for 2017 was $19.39 trillion. Total trade represents about 26% of the US GDP.
While it is still lower than 33%, this shows that the US is doing a good job of encouraging good opportunity for domestic jobs.
30. Management of foreign currency budget- 3.0
The total exports in the United States in 2017 was about $2.331 trillion. The total imports were about $2.9 trillion, giving the United States a trade deficit of about $569 billion. The USA’s GDP as of 2017 was about $19.754 trillion. This trade deficit was approximately 2.88% of the nation’s GDP.
In March 2018, Trump announced he would impose a new 25% tariff on steel imports, and 10% on aluminum. China, the European Union, Mexico, and Canada have announced retaliatory tariffs. This may result in layoffs and hurt the economy.
31. Layers of collective action- 5.0
The US government has many layers, from federal, to state, to county, to the people who cast their votes, all have differing amounts of power. Even in a county as small as San Mateo, the San Mateo City Council began PCE (Peninsula Clean Energy) not only to break up the monopoly that was PGE, but to give consumers the choice to switch to a cleaner energy source.
In the college system, differing levels of power vary from U.S. department of education, all the way down to various PGC committees, and Student Government, which allows students to gain a better grasp on management skills and politics.
32. Pro-business climate- 5.0
If the society places a high value on business, then more people will consider enterprise leadership as a career and more businesses will be created. When business persons enjoy high social status and encouragement from the government the country receives a high score.
For example, when you are introduced to a business owner, if you assume the person is a criminal, then the country will receive a low score on this policy. This was the case in many countries of the former Soviet Union.
America was founded on the idea of the “American Dream”: any one can reach the top if they work hard and play their cards right. This idea of social mobility fuels the never ending race to climb your way to the top of the company, start your own successful business, and make as much money as possible. In many countries, the people who are able to finish school and get a good job, or come up with a business that makes a lot of money are extremely well respected by the community as they will come back to their village/tribe/family and share the wealth and knowledge with those around them. As America is a country of immigrants, being able to come here and make the money to send back, or pass on the idea of mobility to future generations keeps our economy booming.
33. Government enterprises- 3.0
The GDP percentage of government owned or subsidised entities was about 11.8% in 2016.
While the government has good intentions in their choices to subsidize, there are occasionally bad reactions, such as government subsidies for farms producing corn for ethanol. Making more of a switch towards ethanol made sense environmentally to begin with, however the suddenly high demand for corn to produce ethanol cause worldwide food shortages and started riots.
Subsidies such as Obamacare offered insurance for lower income families who otherwise may not have had healthcare. This would ultimately result in less spending in the long run due to diseases and problems being caught quickly and early on, rather than later when they were much worse.
34. International security agreements- 5.0
In 2018, Trump proposed a military budget of 639.1 billion dollars, which is about 3 times the military budget of China- coming in 2nd place at 228 billion, and more than 6 times the amount spent in Saudi Arabia- coming in at 69.4 billion. Besides being one of the few nuclear powers in the world, the United States has more than 800 bases in over 70 countries. It would be unwise for a country to attempt harm to the United States or it’s economy. While 193 of 195 countries in the world are members of the United Nations, the US holds 1 of the 5 permanent seats on the council, and has many allies across the world.
35. Protection of domestic enterprises from government mandated costs- 2.0
In an interview with Rick Scolari, it was very clear that starting his brewing company in Mexico would have been much cheaper than starting his company in the United States due to all of the regulations, extra workers needed, and wages being higher. Mexico is also not facing any tariffs to import, which gives creating the product here quite the disadvantage. He decided to take the hit anyway to try to benefit his local community and bring more jobs to the area.
In the United States, there are many regulations around production of food and beverages such as safety, health, and labor, especially when the product for consumption contains alcohol. Due to the NAFTA agreement in the past and having no tariffs on North American business, having businesses in Mexico was much cheaper because they were not subject to so many regulations, yet could import and distribute products almost as easily as a domestic business could. This being said, NAFTA had only small effects on employment in the beginning, so it is difficult to say how much Tariffs affect the economy, though having such strict regulations and taxes definitely makes starting a business more difficult.
This study presents a detailed study of the economic policies of the United States, as written by Specialist Caleb Plakun. 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 - CALEB PLAKUN POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE 1 5.0 15.0 15.0 100 % 2 4.0 12.0 15.0 80 3 3.0 9.0 15.0 60 4 4.5 13.5 15.0 90 5 3.5 10.5 15.0 70 6 4.0 12.0 15.0 80 7 3.0 9.0 15.0 60 8 4.0 12.0 15.0 80 9 3.0 9.0 15.0 60 10 4.0 12.0 15.0 80 11 4.0 12.0 15.0 80 12 3.0 6.0 10.0 60 13 5.0 10.0 10.0 100 14 4.0 8.0 10.0 80 15 5.0 10.0 10.0 100 16 3.0 6.0 10.0 60 17 2.5 5.0 10.0 50 18 4.0 8.0 10.0 80 19 2.5 5.0 10.0 50 20 3.0 6.0 10.0 60 21 5.0 10.0 10.0 100 22 1.0 2.0 10.0 40 23 2.0 4.0 10.0 40 24 5.0 10.0 10.0 100 25 2.5 5.0 10.0 50 26 2.0 4.0 10.0 40 27 1.5 3.0 10.0 30 28 5.0 10.0 10.0 100 29 4.0 4.0 5.0 80 30 3.5 3.5 5.0 70 31 4.5 4.5 5.0 90 32 4.5 5.0 5.0 90 33 4.0 4.0 5.0 80 34 5.0 5.0 5.0 100 35 3.0 3.0 5.0 60 TOTAL 126.5 267.0 370.0 72.2% ===== ====== ===== =====
INDIVIDUAL POLICIES - CALEB PLAKUN
1. Freedom from Internal Control (5.0)
As stated in Article 13 of the United Nation's Universal Declaration of Human Right, "Everyone has the right to freedom of movement within the borders of each state." Generally speaking, American citizens may move at will through the country. Citizens are under no legal obligation to carry identification papers with them when moving throughout the country, beyond documentation to operate vehicles and boarding airlines. Furthermore, state-issued IDs and records, while not federally-issued, are recognized as valid in all other states in the Union, under the Full Faith and Credit Clause of the U.S. Constitution (Article.IV. Section. 1), and citizens may use a state-issued ID as valid identification as required in any other state in the Union.
Freedom of movement ensures that citizens are free to move to new areas of the country to participate in or create new economic opportunities, and to increase available labor in economically booming regions.
2. Freedom of Speech (4.0)
The American citizen's right to free speech is enshrined in the U.S. Bill of Rights, 1st Amendment, which states: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." According to a Pew Research Center study conducted of over 38 countries in 2015, America ranked highest on the list of Free Expression index, with a score of 5.73; the study's median was 4.07.
Since that survey was conducted, however, there has been a worrying trend in America, in which the conservative party of the nation has increasing used aggressive and violent rhetoric against the national press, accusing them of bias and threatening them with retaliation for reporting objectively. Most egregiously, the President of the United States has threatened to revoke the broadcasting licenses of news organizations he does not agree with, and praised a Republican House of Representative Member for physically assaulting a Guardian reporter in 2017.
Freedom of speech not only leads to a robust exchange of ideas and innovation in the business world, but also leads to the development of a robust arts and entertainment industry. America's Hollywood studio industry - perhaps the premier studio industry in the world - made $29.4 billion dollars in domestic revenue alone in 2010.
3. Effective, Fair, Police Force (3.0)
As of 2006, America maintains a police force of 284 police personnel per 100,000 citizens. This is slightly lower than the global average of 300 police personnel per 100,000 citizens. Foreign Policy's Failed States Index, compiled in 2010, ranks the United States as 37th out of 177th in the category of "Suspension or Arbitrary Application of the Rule of Law and Widespread Violation of Human Rights". The United States Department of Justice does not track police shootings - all such databases are maintained by news organizations and nonprofits. According to the organization "Mapping Police Violence", 1,147 individuals were killed in 2017 by police shootings.
Regarding public perception of police corruption, a 2016 survey conducted by the Cato Institute found that 65% of Americans think police regularly practice racial profiling, a practice 63% of those surveyed oppose. Broken down into demographics, the survey found a strong correlation between perception of the police and the likelihood of reporting a crime: 68% of respondents who identified as white had a favorable attitude towards local police, and 78% said they would definitely report a crime. These numbers drop to 40% and 54% in the African-American community, the community that is disproportionately affected by police violence - of the 1,147 individuals killed by police in 2017, 25% were African-American. This despite the fact that African-Americans make up only 13% of the total U.S. population.
A strong and universal rule of law in a nation creates a stable environment for citizens to pursue economic opportunities. Individuals who feel that they cannot trust law enforcement to protect their interests will be unwilling to invest time and resources into entrepreneurial activities, and tensions between demographic communities erodes civil society, further dampening economic ventures. The United States police force in general serves and upholds the rule of law as laid out in America's legal system. However, the US lags behind most other developed nations in both rule of law and public perception of law enforcement. Public perception of the police among significant minority populations is low, which dampens social and economic "buy in" from said groups.
4. Private Property (4.5)
Property rights in America are generally guaranteed. The American citizen's right to private property is enshrined in the U.S. Bill of Rights, 5th Amendment, which states that never "shall private property be taken for public use, without just compensation." In the 2018 Index of Economic Freedom - compiled by the Wall Street Journal and the Heritage Foundation - America ranked 24th in the world for property rights, with a score of 79.3 out of 100. According to the index, such a score indicates: "Private property is guaranteed by the government. The court system enforces contracts efficiently but with some delays. Corruption is minimal, and expropriation is highly unlikely."
In a recent development, the European Union has signed into law the General Data Protection Regulation (GDPR). The regulatory law lists protection of personal data as a "fundamental right", and is one of the world's most significant pieces of legislation protecting individuals' personal data, also a private property. Here, the United States is again lagging behind their European counterparts. Americans' ability to access and control their personal data in the information age remains a confusing and opaque process.
Private property stands as an essential pillar to modern economic activity. Confidence that one's efforts and capital are one's own encourages investment and continued economic development. Generally, the US protects the rule of law of private property, with minimal corruption or interference. Nevertheless, the country so enamored with laissez-faire economic policies lags behind other nations with more strenuous government oversight.
5. Commercial Banks (3.5)
The United States has perhaps the largest and most complex banking system of any country in the world. As of 2018 there are 4805 commercial banks operating the country. These banks provide essential banking services, such saving account, credit lines and loans, to the 93% of all American households who have bank accounts. These banks are in turn overseen by the Federal Reserve, the central bank of the United States (for more information, see Policy Number 21). The Federal Reserve enforces key regulations, including the percentage of deposited funds available to loan. The Federal Deposit Insurance Corporation also oversees America's commercial banks, and insures deposits of up to $250,000, while also supervising institutions for consumer protection.
Despite such a robust system, the United States has been rocked by periodic crises, including the Savings and Loan Crisis in the 1980s and 90s, and the the 2008 Financial Crisis that brought about a world-wide recession. Failure to adequately prevent these crises - and failure to learn from past mistakes - means that while America's banking system remains premier and influential, basic safeguards to protect consumer wealth remain unenforced.
6. Communication Systems (4.0)
The United States has a comprehensive and intricate net communication network - particularly for a country of its size. The internet was we know it today came out of shared computer servers in the U.S. Department of State. A 2014 study by the White House found that 98% of all Americans had some sort of access to the internet, though a study that same year from Pew Research found only 84% of Americans use the internet, citing cost or problems with the connection as reasons surveyed individuals chose not to use the internet. Nearly thirty-four out of every hundred American residents have access to high speed broadband in their homes, in comparison to just over thirty-two out of every hundred in most high-income nations.
Despite this extensive coverage, America lags behind several other nations in two key areas: First, the United States ranks 20th in the world for broadband speeds (at 25 Mb/s), well below the highest ranked nations of Singapore and Sweden (at 60 and 45 Mb/s respectively). This is to a degree understandably, given the vast size of the American nation. Second, the United States cellular industry is plagued by an oligopolic cartel of carriers - AT&T, Verizon, Sprint, and T-Mobile hold an iron grip on the industry, and as a result coverage and prices are far less competitive compared to many other nations in the world. This author has even found that in remote nations of the world such as Mongolia it is still far easier to purchase a cellular plan and figure out where cellular coverage is than in the United States. Overall, while America has an extensive network of communication systems that is the envy of most of the world, it still lags behind other, more concentrated nation's telecommunications networks.
7. Transportation (3.0)
During the second half of the twentieth century, America invested heavily in it's infrastructure, turning particularly its highway system into the envy of the world. Today, however, America's infrastructure is outdated, decaying, and in need of reinvestment. A report published by the World Economic Forum in 2013 found that America's 25th overall in infrastructure. This is precipitous drop from just over ten years ago, when the United States was ranked 5th overall in 2002. Although the vast and diverse landscape of America makes it tough to compare against smaller, more densely populated nations such as Switzerland (number 1), Hong Kong (number 4), and Hong Kong (number 7), it also ranks behind Canada (15) and Saudi Arabia (23), two other enormous nations with widely distributed populations. This drop in quality has been blamed partly on a lack of political willpower (on both the federal and state levels) to re-invest in infrastructure. Such a re-investment would require spending tax revenue on large-scale construction and projects, which runs counter to the prevailing attitude in America over the last generation, which is to spur growth via tax cuts. Thus, while America's infrastructure foundations are both wide and deep, serious decay drags on economic growth, and lowers its score as a result.
8. Education (4.0)
Public education in America parallels most developed nations in its ubiquity, even if not necessarily in its quality. According to the 2014 census, just under 90% of citizens aged 25 or younger had a high school diploma or corresponding degree. This is well above the global norm, though below many other developed nations such as Sweden and Japan, with rates above 95%. However, high school students in America place deep in the middle of OECD nations, ranking slightly above the OECD average in science reading, but below average in mathematics.
Where America truly differs from most other developed nations is its extensive private education industry, particularly its private university program. On the one hand, America's universities are truly world exemplars: Fully 16 of the world's top 20 universities are found in America, according to U.S. News and World Report. Furthermore, America's universities are so highly regarded that in 2014 almost one million international students - fully 19% of the entire global international student population - were studying in America. On the other hand, with private universities come exuberant costs for university degrees - whereas most OECD nations offer degrees at either no or little cost to their citizens, American students pay on average twenty thousand dollars per year at a public university, with costs climbing even higher at private universities. Students in America now hold over $1.4 trillion dollars in debt, a crushing economic burden for graduates just entering the workforce, a a long-term destroyer of economic wealth.
Thus, America's education is, for those who can afford it, possibly the best in the world. For those who cannot, it creates debt at a critical juncture of a young person's life, and exacerbates wealth inequality.
9. Social Mobility (3.0)
A common theme in American culture is that anyone, through hard work, can achieve "the American dream" of wealth and prosperity. In the past few years, however, mounting evidence has shown that social mobility in America lags far behind other developed nations. A study published by the Economic Policy Institute found that America lagged far behind several developed counterparts, including Denmark, New Zealand, Australia, Canada, France, Japan, Germany, and Spain. The United States lagged so far behind, in fact (13th place), that a poor child born in Denmark (with the highest social mobility of all surveyed nations) was twice as likely to rise to the highest quintile as an American child. A paper published by the Brookings Institute argues that income inequality has increased in the last two decades, and this in turn drives down social mobility. In turn, a major study out of Harvard in 2014 argues that social mobility has not appreciable decreased for children born between 1971 and 1986; however, that same study noted how race and geographic location - sometimes a difference of only a few miles - could have tremendous impact on a child's future income.
Taken together, the data shows that America, while still of nation of higher social mobility than much of the global South, does not live up to its ideals of the American dream.
10. Share of All Jobs in Small Businesses (4.0)
The United States has a vibrant small business ecosystem. According to a 2018 report from the U.S. Small Business Administration, 58.9 million Americans, or 47.5% of the country's employees, work in firms of 500 workers or less. Of those, approximately 40 million were employed at firms of less than 100 employees, or approximately 32% of the country's employees. Indeed, 99% of all businesses in America are listed as small businesses (the vast majority of these being single employee firms).
An uptick in concentration across industries, however, has led to increasing inequality in profits among firms. While small firms continue to make up a large part of the workforce, more and more, profit is generated primarily among the largest "Superstar firms" in their respective industries, for example Apple, Amazon, Walmart, and other giants. These profits, rather than distributed evenly among the labor force, concentrate in the pockets of owners and CEOs, or overseas in tax havens. Thus, while America maintains a strong small business environment, long-term trends point to an erosion of small-firm entrepreneurship and growth, lower America's score.
11. Freedom from Outside Control (4.0)
64% of America's citizenry has never left the United States. Inside the US, a strong streak of individualism and even "American Exceptionalism" (the idea that America is unique in the world and need not follow the paths of other nations) means that the United States aggressively prevents other nation's law and international treaties from directly impacting citizens. Even as America's foreign policy for the last half century was to enforce a Western liberal world order, the United States also went out of its way to never ratify such treaties and international laws created in this order. Examples of these include: The Convention on the Rights of Children (1989), the United Nations Convention on the Laws of the Sea (1991), the Comprehensive Test Ban Treaty (1996), the International Convention for the Protection of All Persons from Enforced Disappearance (2006), and the Paris Climate Agreement (2017). While this tendency has negative repercussions for America's long-term foreign policy, they certainly keep American citizens free from control any other country's agencies. Taken together, America receives a high score for Freedom from Outside Control.
All that said, there is also mounting evidence that the President of the United States colluded with a global adversary to win the election, which would put him as a compromised asset working for the interests of a foreign power. This lowers the score, and if true, would drastically reduce the score further.
12. Protection of Domestic Enterprises (3.0)
International trade in America will account for 28% of GDP in 2018, according to the Heritage Foundation, and is ranked as "moderately important" to the nation's economy, according to the Foundation's metrics. The World Bank lists America at number 133 of countries with the highest tariff rates in the world - with an average of 2.79% - and 48 countries with lower tariff rates, including Canada, Japan, Germany, Finland, Norway, the UK, Hong Kong, and Singapore. Despite having higher tariff rates than many developed economies, America still runs the highest (though not only) trade deficit in the world, $592 billion in 2016.
With the decline in American middle-income purchasing power, it would appear that the United States' open trade policies are damaging to its domestic enterprises, and America's industries are suffering as they lose out to lower-cost alternatives in the rest of the world. However, even as these trends continue, manufacturing continues to grow in the United States, and is expected to grow another 2.8% over the next three years. America, though no longer the number one manufacturer in the world, is ranked second (behind China), and produces 18% of all manufactured goods in the world (behind China's 20%). The decline seen in America's industries is instead in its employed labor force: from over 25% of its labor population in 1970, America's manufacturing workforce now accounts for merely 10.5% of the labor population. These trends point towards automation, not free trade, as the reason for jobs lost in American industries.
Ultimately, most American industries have continued to thrive in the globalized economy, despite relatively light protection from foreign competition. Where the benefits of such growth have gone, of course, remains another matter.
13. Foreign Currency Transactions (5.0)
The US dollar is not only the sole currency used in the United States; its status as the world's currency means the dollar can even be used by American citizens traveling outside the country. For these reasons, as well as the US dollars premier reputation and trust, America rates very high on its Foreign Currency Transaction score.
14. Border Control (4.0)
Historically, the United States has been well protected from intrusion and invasion thanks to its position between the Atlantic and Pacific Oceans. In addition, the United States shares the longest peaceful border in the world with Canada, its largest trading partner. Such an open policy has meant that trade between the two nations is quite high, and is estimated to total over $450 billion in 2018 (exports and imports).
As the largest market in the world for illicit narcotics, Americans were estimated to spend $108 billion dollars on illegal drugs annually, according to a 2010 White House study. Most of these substances were smuggled illegally into the United States, and most via maritime routes or across America's border with Mexico. The United States government's inability to successfully control this trade reduces the nation's border control score slightly.
In recent years, America has been gripped by a bizarre and xenophobic obsession with illegal immigration, and populist calls to close off America's borders and shut down immigration have become widespread. Illegal immigration has been found to have a negligible to minor impact on low-income workers wages. In return, illegal immigrants paid $12 billion in 2013 into federal, state, and local taxes. That same year, the Social Security office estimated that illegal immigrants paid $15 billion dollars into Social Security, a system they have no expectation of seeing returns from. Despite this, the federal government spends upwards of $19 billion dollars cracking down on illegal immigration. This wealth-destroying hysteria also lowers America's border control score somewhat, which is otherwise very high.
15. Currency (5.0)
The United States dollar remains the de facto world currency, and is both recognized and used the world over. In 2017, 64% of all global foreign reserves in the world were held in US dollars, the next closest being the Euro at just under 20%. One-third of the entire planet's GDP is created in economies with currency pegged to the US dollar. As other nations have grown in economic influence, there have been attempts to replace the US dollar with either a truly international currency or another nation's currency, such as the Euro or the Chinese Yuan. So far, however, these efforts have had minimal disruption to the the dollar's global dominance. For all these reasons, the United States currency rating is exceptional.
16. Cultural, Language Homogeneity (3.0)
The United States is currently in a period of social instability, as prior norms of cultural and language homogeneity are challenged by minority demands for recognition and space in the socio-cultural and political spheres. In comparison to most nation-state which coalesced in the 19th and 20th centuries, the United States did not (officially) form to serve as the singular political entity for a singular nation or ethnos of persons. No ethnicity or nation is described as the overseer of the United States in its constitution. Officially, America has no official language, although 32 states have ratified English as their official languages. Despite this, a clear cultural identity - based around historically European immigrants and their socio-cultural roots - has served as the de facto national identity since the nation's inception. In comparison to many other nation-states, America has historically done a much better job integrating and assimilating immigrants into this cultural (Recent America immigrants are for example employed at a rate twice that of France's immigration population).
More recently, the rise of an ugly (and wealth destroying) backlash of majoritarianism has cast America's economic, cultural, and political future into doubt - via tariffs, an increase in domestic terrorism against ethnic and religious minorities, and creeping authoritarianism.
17. Political Effectiveness (2.5)
America's political system has been in a dangerous state of paralysis for the better part of the last twenty-five years. Beginning in the mid-90s, aggressive posturing by the Republican legislative has resulted in four government shutdowns as the political parties failed to come to agreements over spending, and millions were lost as federal workers were put on forced furlough and important government functions shutdown for up to weeks at a time. Deep divisions in the country and the political system have made the legislative branch the least productive it has been in most of America's history. Responses to natural disasters, including Hurricane Katrina in 2006 and Hurricane Maria in 2017, have been criticized for inept response. Though institutions such as FEMA remain in place, the United States has shown a worrying inability to solve long-term problems in the federal level.
18. Institutional Stability (4.0)
As one of the oldest modern nations in the world, America's institutions are extremely stable. A civil war in the 19th century and brief periods of national emergency aside, America's institutions have stood and worked uninterrupted. A rise in anti-democratic rhetoric and posturing on the part of America's right-wing is still too nascent to say definitively whether there will be lasting damage to America's institutional stability, but the development is certainly worrying, and lowers the score as a result.
19. Honest Government (2.5)
Corruption, in America has grown dramatically in the last few years. In 2017, America ranked 16th (tied with Austria and Belgium) in terms of corruption in the world. Almost 70% of the populace does not believe the government is working to fight corruption, and 44% believe the office of the Presidency specifically is corrupt. While the United States remains at its core a representative democracy and in aggregate aligned to citizen's interests, corruption - both perception of and an actual increase in - lowers America's score significantly.
20. Common Laws (3.0)
The equality of all in the eyes of the law is enshrined in the American Declaration of Independence. In reality, racial bias, wealth disparity, and a legal morass of statues prevent the law from being applied equitably and fairly to every citizen of the country. According to the World Justice Project, America ranks 19th in the world for rule of law, receiving particularly low scores for affordability of the legal system and lack of discrimination. While the trend is downward and worrying, the legal system remains in place and is recognized as the premier arbiter in American civil affairs, and extrajudicial or extraordinary uses of power by officials remain rare.
21. Central Bank (5.0)
The United State's central bank is the Federal Reserve. Unlike many other nations' central banks, the Federal Reserve has stayed politically neutral and nonpartisan in its structuring. The chairman and board members' terms are served out of sync with federal elections, and so are not beholden to either the legislative or executive branch to serve. This allows the Federal Reserve to plan long-term policies that most benefit America's banking system, as opposed to short-term gains for political parties.
22. Domestic Budget Management (1.0)
Despite its status as the wealthiest nation in the world, America has not been able to pass a balanced budget since 2001. This in and of itself is not an inherent negative for economic growth - America ran a deficient throughout the postwar boom years, when the U.S. economy grew at exceptionally high rates. However, in recent decades, failure to pass a balanced budget has not only pushed public debt levels to record highs, itself a possible drag on economic growth. In 2013, an inability for America's two political parties to agree to a balanced budget caused a month-long government shutdown. In the short-term, this disrupted essential federal services and cost the government approximately $2 billion dollars pay workers on furlough. In the long-term, America's credit rating, prior to this the highest in the world, was for the first time downgraded by Standard's & Poor's, an unprecedented and wholly avoidable act. At the same time, a failure to pass a budget triggered sequestration, whereby federal departments were forced to make arbitrary cuts to their budgets. As these cuts were enforced arbitrarily, budgets were reduced with little foresight or planning, and both short- and long-term economic growth were impeded.
These debacles show that, despite economic wealth, a crisis of political management and responsibility grips the American federal government, and severely destabilizes America's economic prosperity.
23. Government Debt (2.0)
As of June 2018, the United States' total government debt stands at $21.7 trillion, and total foreign debt at $19.3 trillion. This puts the debt-to-GDP ratio for the United States at 105.4%, well above what would normally be considered advisable levels of debt. Despite this, America's credit rating remain high, and short-term effects are minimal, so political parties in office are generally loathe to address debt issues. Long-term however, debt levels of such high proportionality threaten economic growth in the nation.
24. Economic Statistics (5.0)
A virtual cornucopia of data and statistics of the American economy is put out at a breakneck pace by both government offices and third-party observers. This information is cross-referenced and evaluated by numerous offices from dozens of countries and hundreds of organizations, and so can generally be considered very accurate. This is logical: as the largest economy in the world, literally billions of individuals around the world want to have at least some basic understanding of America's current economic situation.
25. Protection of Public Health and Safety (2.5)
Traditionally, America has had a strong public health policy. The last recorded case of polio in a U.S. resident was in 1979. Tuberculosis, historically a dangerous and virulent communicable disease, is found in only 3.1 people for every 100,000. Infant mortality rates are 5.7 deaths for every 1,000 births. This is much higher than the lowest rates found in Japan (1.9 deaths for every 1,000 births), but low in comparison to much of the world, where rates are as high as over 80 deaths per 1,000 in places like Chad and the Central African Republic. Life expectancy is on average 78.69 years for men and women aggregated; this is somewhat lower than many European social democracies, but still an enviably high number for the rest of the world.
As a nation flush with wealth, America has found itself battling an obesity epidemic in recent decades. Although this crisis is not isolated to the states, America has the highest rates of obesity in the developed world - 39.8% percent of the population, or over 93 million Americans, were obese in 2016. Only a few island nations with unique socio-economic situations have higher rates. Rates of adult onset diabetes are also exceptionally high - 10.79% of adults versus 7.85% in other high income nations.
The biggest drain on wealth from public health in America, however, is medical insurance. The United States stands alone in the developed world as having no national health insurance policy, and as a result 28 million Americans were without health insurance in 2017. Approximately two-thirds of all bankruptcies filed in America are thought to come from medical bills, according to a 2009 Harvard Study. In addition, many Americans receive their health care through their employers and so are hesitant to leave their jobs and invest time and resources into new, risky ventures.
While the United States enjoys public health and safety far higher than the vast majority of the world, it lags behind other high income countries, and its backwards health insurance policies create a completely unnecessary drain on the economy.
26. High Wage Policies (2.0)
As of 2013, America has a federally enforced minimum wage of $7.25. In real wages, this is a markedly smaller amount than the high of $10.69 in 1968, and follows a general downward slide in real purchasing power of said wage (although the decline has merely plateaued in the last decade). Many Americans blame outsourcing - a result of high wage workers losing work sent overseas to low wage foreign competition - as one of the primary reasons for job loss. Production output has in fact increased however over the last thirty years, even as over 2.5 million jobs were moved to China. This strongly suggests automation, not outsourcing or high wage policies, as the cause for job loss.
Even those able to work still find themselves unable to afford basic necessities. 17.6% of part-time workers, and 6.7% of full-time workers, were still on government subsidies according to a 2015 report from the U.S. Census Bureau.
Meanwhile, America's GINI coefficient - a measure of a nation's income inequality - has risen from 34.6 in 1980 to 41.5 in 2016, 62nd in the world and the highest of any industrialized nation. Between 1970 and 2014, the share of aggregate income held my middle income households dropped from 62% to 43%; all of those loses went to upper income households.
In short, while America affords its citizens more wage and job protection than many other emerging nations throughout the world, stagnant wage growth and widening income inequality mean much of the working population is unable to afford most consumer goods beyond basic living necessities.
27. Environmental Protections (1.5)
Decades earlier, America was at the epicenter of the environmental movement. The Clean Water Act, passed in 1972, was a landmark law that set the standard for regulating pollutants in America. Successful lobbying by environmental groups led to the formation of the Environmental Protection Agency, and the subsequent banning of harmful chemicals and pollutants, also in 1972. In 2016, approximately 25% of the territorial area of the United States was protected area, and, while 44% of the population is exposed to air quality exceeding W.H.O. guidelines, this is less than the aggregate of other high-income nations (75%).
In the last twenty years, however, the United States has aggressively reversed its prior commitment to the environment. Numerous regulations and guidelines for harmful particulates in the atmosphere have been gutted. The United States produces 16.5 metric tons of carbon per person annually, well above the aggregate of other high income nations, and nearly 15% of the world's total of climate change emissions. Most egregiously, despite the prior administrations key role in drafting the Paris Climate Agreement, the Trump administration has pulled out of the international accord, joining Syria and Nicaragua as the only three nations to not ratify the agreement. Such an agreement is essential to stave off truly disastrous rises in global temperatures, which the latest reports warn could come about in as few as twenty years. Cataclysmic climate change and the collapse of Earth's biosphere will greatly impede economic growth.
28. Strong Army (5.0)
The United States has one of the largest militaries in all of human history. In 2017, the U.S. spent $610 billion dollars on its armed services - 35% of all the world's spending on military expenditure, the most of any nation in the world. In terms of personnel, it is the third largest, after the Chinese Liberation Army and the Indian Armed Forces. Its size and strength allows the U.S. to project its influence well beyond America's borders to virtually every region in the world.
29. Foreign Trade Impact (4.0)
The United States is a key player on the International Trade stage, and a healthy percentage of its GDP is made up of imports and exports. In 2016, the United States exported approximately $2.2 trillion dollars, which was just under 12% of that year's GDP. That same year, imports accounted for just under 15% of GDP.
More recently, several U.S. policy decisions have spiked fears of a more unfriendly trading environment, and the score suffered as a result. These decisions include pulling out of negotiations for the Trans-Pacific Partnership (TPP) in 2017, and, even more alarming, over $200 billion dollars worth of tariffs leveled against China in what may be the beginnings of a protracted trade war.
30. Management of Foreign Currency Budget (3.5)
Limited foreign reserves are vital to a country's economic security: these reserves can be used to maintain liquidity in the event of an economic crisis, provide confidence to foreign investors, and meet external obligations. In 2016, the United States held foreign reserves worth approximately $118 billions in foreign currency, the 27th largest reserve in the world. That same year, the U.S. had a trade deficit of $592 billion, partly a result of a rising dollar strength. These numbers put the United States in less-than-ideal trade situation. Responses, however, have made the situation worse: Tariffs imposed on steel and aluminum by the Trump administration will cool international confidence in the U.S. markets, raise prices on consumer goods, and therefore ultimately lower the standard of living for American consumers.
31. Layers of Collective Action [4.5]
As a federal union with a vast civil society and numerous hubs of commerce and innovation, America is home to a wide variety of collective enterprises. The federal government itself is divided into three branches - executive, legislative, and judicial - and each state has their own individual constitutions, assemblies, and laws and regulations. Nonprofits, foundations, and other nongovernmental organizations are free to operate within the U.S., and can qualify for tax-exempt status. In 2003 there were 15,000 school boards in America. In addition, American society, particularly in its cities, has a wealth of organizations, clubs, and interest groups for citizens to join and participate in.
Despite all this, the last several decades has seen a noticeable decline in civic participation in the America. This issue is not merely endemic to the United States, but has brought unique situations and a sense of disenfranchisement to some on the country,
32. Pro Business Climate [4.5]
Business acumen and entrepreneurship are highly valued in American culture and society. As such, America generally has a very positive business climate. It was ranked number three in 2017 in US News and World Report's survey of the best countries for entrepreneurship. According to the World Bank in 2017, it takes 5.6 calendar days on average to complete the procedures to operate a business in America. This is higher than the North American aggregate (3.5 days), but lower than the average for wealthy nations (10.72). The same study found that on average it costs an American citizen 1.1% of U.S. GNI per capita to start a new business in America. This, again, is higher than the North American aggregate (0.75%), but much lower than the average for wealthy nations (4.6%).
33. Government Enterprises [4.0]
Between 2000 and 2015, the government gave out $68 billion dollars in grants and special tax credits to businesses; two-thirds of these went to corporations. The total for loans, loan guarantees, and bailout assistance runs into the trillions of dollars (largely a result of the 2008 crash and subsequent bailout of the banking sector). These subsidies are given to protect key strategic industries in the country, including agriculture and energy. According to a 2016 Council on Foreign Relations report, removing these subsidies in the energy sector would have negligible impact on both production and greenhouse emissions.
While these subsidies in total are a very small percentage of GDP, they generate waste and inefficiency in several sectors, and so reduce social efficiency and welfare in turn.
34. International Security Agreements [5.0]
America stands as one the premier architects, supporter, and benefactor of the North Atlantic Treaty Organization (NATO), one of the widest reaching defense agreements in history. A total of 29 member nations have pledged to come to the defense of any nation in the Treaty attacked. To date, this has only been invoked once - following the September 11th attacks against the United States in 2001. America's standing in international security agreements is therefore the most enviable position in the world.
35. Protection of Domestic Enterprises from Government Mandated Costs (3.0)
U.S. firms frequently complain about the high costs of doing business in America. In a 2014 survey done by the National Association of Manufacturers, 88% of firms said federal regulations were a top concern for them. The annual cost burden Regulatory was estimated to cost the U.S. up to 8% of GDP, according to a report published in 2006 out of Stanford.
Nevertheless, the costs of manufacturing in America - thanks to cheap petrochemicals and electricity - remain lower than European counterparts, and as of 2014 are only about 5% more expensive to produce in America than China, according to a Boston Consulting Group report. In addition, despite costs, America remains well behind the rest of the developed world in regards to workers' benefits and regulations - the U.S., for example, remains the only one of 41 developed nations that does not mandate maternity leave for workers.
This study presents a detailed study of the economic policies of the United States, as written by Specialist Greer Whitaker. 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 - GREER WHITAKER POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE 1 3.9 11.7 15.0 78 % 2 4.7 14.1 15.0 94 3 4.0 12.0 15.0 80 4 4.9 14.7 15.0 98 5 4.4 13.2 15.0 88 6 4.8 14.4 15.0 96 7 4.7 14.1 15.0 94 8 4.2 12.6 15.0 84 9 3.7 11.1 15.0 74 10 4.1 12.3 15.0 82 11 5.0 15.0 15.0 100 12 2.9 5.8 10.0 58 13 4.8 9.6 10.0 96 14 2.2 4.4 10.0 44 15 5.0 10.0 10.0 100 16 3.1 6.3 10.0 63 17 3.0 6.0 10.0 60 18 4.9 9.8 10.0 98 19 1.8 3.6 10.0 36 20 3.3 6.6 10.0 66 21 4.0 8.0 10.0 80 22 1.3 2.6 10.0 26 23 1.9 3.8 10.0 38 24 4.4 8.8 10.0 88 25 3.9 7.8 10.0 78 26 4.1 8.2 10.0 82 27 3.5 7.0 10.0 70 28 5.0 10.0 10.0 100 29 4.3 4.3 5.0 86 30 2.1 2.1 5.0 42 31 3.0 3.0 5.0 60 32 3.9 3.9 5.0 78 33 3.7 3.7 5.0 74 34 5.0 5.0 5.0 100 35 1.9 1.9 5.0 38 TOTAL 135.4 287.4 370.0 77.7% ===== ====== ===== =====
INDIVIDUAL POLICIES - GREER WHITAKER
1. Freedom from Internal Control - 3.9
Though the United States is built on the foundation of individual freedom, liberty, and justice for all, in practice, the overbearing nature of the modern US regulatory regime has changed how business is done in the United States over the last few decades, and the government's role in facilitating market activity. In 2015, the US fell to 12th place in business startup activity among developed countries while trends since 2009 resulted in business deaths outnumbering business births for the first time in 35 years. While market freedoms once propelled businesses and fueled American economic growth, their lack thereof in the face of the growing power and pro-active control of government bureaucracies now hinders it significantly, with government prohibitions growing with each legislative cycle and owning and operating businesses becomes more and more difficult. Though the status quo still sees America as one of the premier destinations for businesses because of the ease and safety with which business can be conducted, it is not the same market environment it was just a decade or two ago, and the score reflects a far-less-than-perfect effect on wealth creation.
2. Freedom of Speech - 4.7
The United States has arguably the world’s greatest domestic protection of the freedom of speech, with the values of this freedom enshrined in the most unassailable of Bill of Rights Amendments. So deeply ingrained is this freedom and the knowledge of the First Amendment so prevalent in American culture, that its greatest threat comes citizen self-censorship and not from the government’s own breaching. While still the safest place in the world to speak freely, these protections of the freedom of speech no longer extend entirely in their breadth to businesses as the fast-reaction nature of the internet is promoting the guilt by association and eroding the idea of innocent until proven guilty. This score reflects the economic driver of wealth creation that is the USA’s protections of the freedom of speech, but a less than perfect score represents the growing culture of self-censorship, the advent of the court of public opinion, and the effects these trends have on businesses being exposed to customers’ true market preferences and the availability of possible opportunities.
3. Effective, Fair Police Force - 4.0
Though this score indicates a positive effect on wealth creation, it is markedly low for a country that prides itself on the rule of law. The disparity between what the score is and what it should be is mostly explained by American citizens’ own lack of trust in the police force to be properly educated on the law and to dispense it fairly, equally, and without bias. These are the results of creeping trends of racial bias in the police force and the inability of average Americans to afford enforcing their rights in the court of law, as opposed to large corporations or the individually wealthy’s ability to do so. American minorities, now a majority of the American population in their whole, have the most unfavorable views of the police force of any demographic, representing yet another demographic divide in the perception of the police force’s efficacy, to add to the disparity of justice based on wealth and income. Despite the grim outlook and negative headlines concerning police officers that dominate headlines, the United States still has one of the most objectively sound and efficiently organized police forces in the world, with enough legitimacy to operate effectively and promote business confidence and activity.
4. Private Property - 4.9
The United States has one of the world’s most robust and effective infrastructures for recognizing, protecting, and enforcing property rights for citizens and businesses alike. Despite eroding freedoms and free market protections in other aspects of government and the economy, the protection of property rights with a strong set of laws and court precedents sets the US apart with almost a hundred years more experience in developing these frameworks in a free market republic than other countries in the world. Though not all of the US population can afford the judicial enforcement of the protection of property rights, and as such receives a less than perfect score, the high score in this category reflects private property protection as one of the primary drivers of the US economic powerhouse, with the abundantly clear and ultimately equal application of the law and protection of property rights operating within an organized and transparent system of courts that respects both foreign and domestic plaintiffs with nationally recognized titles.
5. Commercial Banks - 4.4
The practical soundness of US commercial banks and their net effect on wealth creation in the country is reflected by the astronomical amounts of money that are funneled through them by American citizens alone at $16.8 trillion, as well as the score in this category. Citizens can trust banks to hold and protect their deposits and can expect to be able to withdraw their money reliably in all part of the country. Businesses can rely on domestic lending practices to help facilitate the establishment and growth of businesses, new and old.
However, as with many other American institutions and political traditions, the slow but steady changes applied over the last few decades of the modern era have compounded to change the underlying and fundamental health of these institutions. Beginning with the repeal of the Glass-Steagal Act in 1996, commercial banks have gotten so much of their income from financial, non-business activity that is has fundamentally the changed the nature of their commercial activity. With the priority shifted away from sound lending practices to profit creation, modern US banks can often be predatory in their operations, causing distress for businesses and citizens alike and preventing a perfect score. These leaves those dependent on lending at much greater risk of both unfair lending practices, and the huge liability that comes with conflating commercial and financial activity, one of the supposed causes of the Great Recession financial crisis.
6. Communication Systems - 4.8
Having both the telephone and the internet invented within its borders, the United States has one of the first and most ubiquitous communication systems in the entire world. Being the birthplace of the smartphone as well, the United States has been at the forefront of telecommunications innovation for as long as the term has existed and according to a 2017 report by the Federal Communications Commission, the United States has one of the most advanced and certainly the largest and most robust telecommunications infrastructure regimes on the planet. For some, this is all but a preface to plans by American entrepreneurs to use a grid of satellite systems to bring internet, and certainly American business, across the globe.
While having such advanced and homogenous communications systems have been one of the primary drivers of business activity and wealth creation in the United States, the only reason this score is not perfect is because of the worrying prevalence of monopolistic firms in the telecommunications market, with over half of all Americans only having 1 firm providing them internet. Along with recent steps back in the spread of healthy communications systems such as the repeal of net neutrality, the birthplace of the internet offers neither the fastest internet in the world nor market protections for it, but prospers under the interconnected society nonetheless. www.motherboard.vice.com/amp/en_us/article/bjdjd4/100-million-americans-only-have-one-isp-option-internet-broadband-net-neutrality www.brookings.edu/blog/unpacked/2018/07/03/unpacked-repeal-of-open-internet-rule-enables-monopoly-networks/amp/
7. Transportation - 4.7
As one of the largest countries in the world and with the most biome diversity, the high score the USA receives here is no small feat. From the proliferation of railroads in the 1800’s to airports in the 1900’s to driverless cars in the new millennium, the United States has always been at the forefront of transportation infrastructure and the resulting interconnected society has driven business activity and wealth creation for the better part of 300 years. Even on the individual city and state levels, the vast prevalence of public transportation railways and buses, ridesharing technology, bike lanes, and the like have all served as bedrock foundations for commercial activity. The only reason the score is not even higher is the underfunded infrastructure regime of the United States that has left as many of its roads and bridges in disrepair. With civil engineers and business leaders alike calling for greater attention to infrastructure management, and many other developed countries enjoying public infrastructure spending nearly double the average of the United States, the nation of innovation must not forget that there is always room for improvement.
8. Education - 4.2
As recently as 2017, the United States stood middle of the pack on education and proficiency in mathematics, science, and reading. 24th out of 71 countries in math, 38th in science, and 25th in reading is highly unimpressive, especially when coupled with the fact that the majority of these rankings are below the average of the tested countries. However, a country of 330 million cannot be entirely expected to produce above-average scores in all respects, and part of the saving grace of the US education status quo is that it has one of the most competitive post-primary school academic environments and almost all of the world’s most prestigious universities, including Cal Tech, MIT, and the Ivy League schools.
It is here that the US excels, with the highest quality of university education in the world. Indeed, foreign enrollment at US colleges has doubled since the late 2000’s, with the quality and competition increasing the more advanced the degree is. With a top-heavy educational infrastructure, the United States receives a relatively good score as the current regime ensures literacy and basic education sufficient for a modern economy, if certainly lacking, but makes up for it with world-leading post-secondary education. http://www.pewresearch.org/fact-tank/2017/11/20/new-us-foreign-student-enrollment-doubled-since-great-recession/
9. Social Mobility - 3.7
What was once heralded as the Land of Opportunity for its socioeconomic mobility, the United States now suffers from a lack thereof with an academic consensus that social mobility peaked between 1950 and 1980 before sharply declining. Coupled with Gini index ratings that rise precipitously in that exact time range, peaking at 41.5 in 2016 at levels not seen since the Great Depression, it has become quite obvious that the American Dream is not what it once was. The score still indicates a positive effect on wealth creation, however, and that is because the opportunity for social mobility still exists and many millions still thrive with the United States’ peerless advanced education and merit-based hiring in its plethora of career opportunities. However, the shocking rate of decline in social mobility, coupled with a precipitous rise in income inequality that is now seen as being more permanent, the United States’ score suffers in comparison to other developed countries with no such worrying statistics.
10. Share of All Jobs in Small Businesses -
4.1 for share of all jobs in small businesses, 3.6 for openness of economy to new businesses
The United States’ share of all jobs held by workers in a small to medium-sized enterprise fell to 47.5% in 2017, from 48.1% the year prior. On its face, this number is within the goldilocks zone of small business employment in its reflection of an environment conducive to new business creation. Digging deeper, however, we find that a shocking rate of growth in federal regulations in the past 2 decades has fundamentally altered the business environment in the United States. With the Federal Registrar being published at over 89,000 pages in 2016, and for every law being passed in the US legislature being met with 39 regulations from non-elected government agencies, it is not surprising then that in 2009 the number of business deaths surpassed the number of business births for the first time in 35 years. According to a 2014 report by the Brookings Institution, business dynamism has precipitously dropped in the United States relative to its own success in the area just a short while ago. Indeed, as the Land of Opportunity, the United States is still one of the best places to conduct business in the entire world and is still producing juggernaut firms such as Uber and Amazon, and as such produces a score that indicates it is still conducive to wealth creation, though these benefits do not extend to entrepreneurs and new businesses as much as they did only a decade ago. https://www.sba.gov/sites/default/files/advocacy/2018-Small-Business-Profiles-US.pdf https://www.brookings.edu/research/declining-business-dynamism-in-the-united-states-a-look-at-states-and-metros/
11. Freedom from outside control - 5.0
Citizens of the United States have always been free from the jurisdictions of other nations, arguably since the country’s founding in 1774, but certainly since expelling its foreign invaders in the War of 1812. With one of the world’s highest rates of gun ownership at 101 guns per 100 citizens, the United States has established its borders with the full weight and power of its globally leading powerhouse economy and the most powerful military in human history. Sometimes this freedom from outside actors can be enforced to a fault, with many war crimes from the Iraq War going unpunished and global trade organizations and courts such as the ICC powerless to affect US citizens due to an inability to project authority into the borders of the US.
12. Protection of Domestic Enterprises - 2.9
Here, the United States receives a suboptimal score because the country’s trade deficit of $568 billion stands as an example of how well domestic enterprises are protected. Though free trade has historically displayed its benefits, it can only be taken so far before it becomes apparent that half a trillion dollars leaving the US as part of the trade deficit would be better served paying American companies and individuals. This byproduct of globalization comes with its own set of advantages, such as cheap foreign goods which bring down domestic prices, but comes with its own collateral damage in the form of dying domestic industries and the resulting poverty, as well as stagnant wages. In a populist wave that encapsulates the frustration with the global economy, President Donald Trump embarked on a campaign of tariff institution and trade agreement renegotiation in an attempt to flex the merits of the protection of US industries. Though it remains to be seen what economic impact this new-age protectionist policy will have, it is encouraging to see that it is not being applied with abandon, but rather targeting industries in which the US has a comparative advantage to maximize the recapture of consumer dollars.
13. Foreign currency transactions - 4.8
The United States indeed has but one accepted currency for transactions within its borders and that is its own US dollar, though foreign currency can be easily exchanged at banks and currency exchanges that are readily available to its citizens, where this even becomes an issue. Financial markets based in the US often move massive amounts of foreign currency and conduct transactions in almost all the different currencies in the world. For the purposes of conducting fiscal and monetary policy, the United States receives a high score for its uniform treatment of foreign currency, the ease with which currencies can be exchanged for legal tender so that foreign visitors can conduct business, and the strength of US dollar and monetary control.
14. Border control - 2.2
The low score the United States receives in this area is somewhat misleading considering the country has one of the world’s tightest borders coupled with one of the world’s fewest physical borders. On paper, the US has a relatively effective control of the flow of goods, a heavily militarized and guarded southern border with Mexico, and government agencies with ample funding to protect and enforce its borders with the world’s strongest military to back it up. This score, and particularly its reflection of the effect of wealth creation, is tempered because of the still massive numbers of immigrants penetrating the southern border and the ease with which illicit goods and services enter and leave the United States. The massive amount of illegal immigration in recent history has not only resulted in the expected economic disruptions that come with tens of millions of undocumented denizens, but also a significant cultural disruption that comes with millions of predominantly non-English speaking potential voters that reliably support only one political party. The overarching effects of this combination of factors are not nearly as studied as they should be, but the negative effect on wealth creation is mostly clear and captured in this score.
15. Currency - 5.0
The United States has but one legal tender, and that is its US dollar. No other currencies are legal tender in the US. Though its high score in this policy criterion reflects the effective enforcement of a single national currency and the efficacy of this fact in directing fiscal and monetary policy, it also reflects the prevalence of the US dollar in transactions across the globe, in everything from financial markets to foreign investment to the purchase and sale of oil in the appropriately terms “petrodollar.” This means that the US is able to assert economic influence not only within its borders, but across almost all the world. This predominance, particularly that of the petrol, is fervently protected by US foreign diplomacy for its effect on wealth creation, sometimes at the expense of other countries.
16. Cultural, Language Homogeneity - 3.1
This score embodies the fact that the current period in American history is one defined by internal divisions along almost every conceivable line, from race to income level to political and sexual orientation. Identity politics and the long expected growth of the minority populations in the United States has produced a status quo that is marked by an ever-deepening cultural divide and the increasing proportion of the population that does not have a working knowledge of the English language but is relied upon heavily in service and labor industries. Naturally, these issues have a strongly negative effect on wealth creation.
However, this score reflects the fact that while these contemporary issues are hurting the economic cooperation in the economy, they are tempered by how much Americans rely on each other for everyday goods and service and establishes a baseline functioning in our society that strongly contrasts with and is light-years ahead of many other countries in the world that are rocked by deeper, older, and more violent divisions that seriously and often critically hinder whole countries. At the very least, Americans must be grateful for the underlying values that do more to bring us together than push us apart.
17. Political Effectiveness - 3.0
Inexorably intertwined with Criteria 19 and 20, the United States of recent memory has been marked by the struggle between political infighting and the resulting inefficacy versus the entrenched and reliable bureaucracies of the government that strive to solve problems and maintain the world’s strongest economy. From the steady hand of the Federal Reserve which quietly but consistently maintains monetary policy and financial institutions, to the corporate navigability of the US justice system with its labyrinthine but predictable rules, there are rock solid foundations with which businesses can reliably operate and produce wealth in the country which ensure a sustainable status quo. Because this status quo is very precariously balanced and under threat from the seemingly endless decline of political decorum and the cooperation of America’s three branches of government, it earns a score that reflects a system that is not as conducive to business and wealth creation as it once was, but one that has not yet rocked alarmed the business community.
18. Institutional Stability - 4.9
The United States receives a high score for its institutional stability because this policy criterion is arguably the defining benefit of the American business environment. Despite not having the world’s most business-friendly tax laws, regulatory regime, or relationship with voters, the United States is the premier destination for firms and their business in large part due to the stability and relative predictability of the American political and economic systems.
The reliability of American institutions begins with the US Constitution’s Supreme Law of the Land and, calling back to Policy Criterion 20, extends to the hundreds of years of American political, economic, and legal jurisprudence that has laid the foundation for businesses to feel secure and confident in conducting business in the United States and investing in longer-term ventures within the framework of the unshakable reliability of the justice system and its accompanying governmental organizations that can now be said to have already stood the test of time.
19. Honest Government - 1.8
Contemporary American politics is, debatable only to a certain degree, defined by its impotence and hypocrisy. The inability to achieve any sort of political consensus in at least the 2010’s is marked by the rise of what are known as “career politicians” who, accused of valuing re-election and their continued grasp on power more than the best interest of the citizenry and the country as a whole, have skewed and conflicting interests that lead to increased political polarization and the snail’s pace at which the American government currently moves. This is particularly true with the advent of the “money in politics” era that began with landmark 2010 Supreme Court case Citizens United v. Federal Election Commission that allowed almost limitless corporate investiture in American elections.
As a result, the exact circumstances have crystallized in modern America that fit the criteria for a low score in this area, the prevalence of “functionaries who use their office for profit” to the negative effects on wealth creation of the mental gymnastics that those holding public office must jump through to maintain the unsustainable political status-quo. Luckily, there are relatively achievable policies that could have wide-reaching healing effects on this particular issue such as term limits for federal and even state politicians that have been seriously considered and espoused by respected politicians.
20. Common Laws - 3.3
It is not a point of contention that the United States’ justice system overall varies wildly in its efficacy and equal implementation from state to state, county to county, and to an even larger extent, from income class to income class and race to race. From the harsh and uninformed treatment of juvenile offenders, to the inherent racial bias against minorities in courtrooms, to the vastly unequal application of the law to citizens with the wealth to fund prolonged legal campaigns, the US fails in maintaining any semblance of a fair and equal justice system. As a result, the score for this policy criterion is lower than it should be in the world’s foremost “nation of laws.”
However, this score reflects a non-zero and non-negative effect on wealth creation because as much as the US system lets down its citizenry in the fair and equal application of the law, it nevertheless has one of the world’s most effective legal protection of private property and, by extension, one of the most robust frameworks with which companies can operate and resolve disputes. This framework allows for an environment that is, at least until the historically recent spread of democracy and capitalism, almost unequaled in its fostering of business activity due to the relatively predictable enforcement of the law and the safety this exudes for firms around the world.
21. Central Bank 4.0
The United State’s score for central banking is based on a now fully entrenched and highly legitimate central bank, called the Federal Reserve, that operates on a vast bureaucracy of researchers and economic knowledge, with full independence and institutional safeguards that prevent outrageous mismanagement. Coupled with a history of successes and mistakes that were relentlessly studied lends the United States’ Federal Reserve to a high degree of public trust. Tasked with manipulating monetary policy to maintaining low inflation and unemployment rates, and moderating the business cycle to ensure a return to the long-term growth rate, the Federal Reserve operates effectively in the US.
However, the score is not higher because of recent developments that indicate a closer than comfortable relationship between high ranking Federal Reserve officials and the private banking industry which has damaged public trust, as well as a new era of economics including negative interest rate has murkied the waters, so to speak, and made it more difficult to maintain the effective management of commercial banks and monetary policy.
22. Domestic Budget Management 1.3
Here, the United States’ low score is based on what was once only the perception that the US political system and its government were incapable of agreeing upon fiscal consolidation and the management of the budget in service of the long-term economic and technological health of the United States, has become a near certainty with precious few realistic paths to return to sustainability.
This score is now below 1 because the same political machinations that seem sure to doom our economy have congealed a status quo that can maintain American hegemony for at least the next quarter century with established safeguards that may prevent a rapid collapse. Rather, a more likely slower decline allows for more and better opportunities to right the ship.
23. Government Debt 1.9
This low score is based on the world’s largest and most (arguably) unpayable public debt coupled with one of the world’s largest debt-to-GDP ratios at 105.4%. This is compounded by the unfathomability of any immediate abatement of debt creation, no realistic pathway to repayment, and an increase in debt creation under the only political party representing debt reduction and economically fiscal values. Some may consider the debt to be the Achilles Heel of the American economic hegemony, particularly when considering the highly significant amounts of debt held by our global rival, China, though less well known is that most debt is held by the Treasury itself.
Many consider debt to be the most important problem facing the US. However, this score is not even lower because of the United States has, precariously, one of the highest credit ratings in the world and, fueled by the world’s most relentlessly active and rich economy, the United States has the appropriate assets to borrow yet more while maintaining the all-important public perception of credit worthiness.
24. Economic Statistics 4.4
This high score is based on a deeply ingrained cultural and political appreciation for economic statistics and widespread academic study and public scrutiny facilitated by multiple highly respected and cherished government agencies for the collection and dissemination of economic information, such as the Bureau of Economic Analysis, the St. Louis Federal Reserve, and the increasingly ambitious but valuable US Census.
Though the score is high and reflects a greatly positive effect on wealth creation, a current media culture of misinformation and political culture of cherry-picking facts more often than not leads to the improper large-scale interpretation of data, such as skewed unemployment data that does not properly capture job trends, and otherwise robust macroeconomic statistics belying a comparatively stagnant economy. Otherwise, however, the United States can be said to have the world’s largest industry for the study of economics, and the quality of its economic statistics reflect that.
25. Protection of Public Health and Safety - 3.9
The United States of America currently has on one of the world’s most robust and institutionalized bureaucracies for health and safety, including multiple highly funded government agencies, a high public standard for businesses to maintain, and a culture of accountability backed up by a litigious populace. These rules are, relative to the world at large, some of the most effective in the world, fitting for the country which lead the charge for public health and safety in the early 1900’s. Relative to other developed and rich countries though, the United States certainly has room for improvement, particularly in dense, low-income urban areas. As a result, its score in this area reflects a status quo that is certainly sustainable and conducive to wealth creation.
However, the score is lower than what one might expect from the US for a variety of reasons, not least of which is because political infighting has slowed the improvement of environmental safety leading to the consideration of depleted natural resources and safety for future generations in this scoring. More importantly, however, the low score is earned as a result of a string of surprising current events in the United States that indicate a suboptimal health and safety regime, such as Flint’s water crisis which resulted from unchecked industrial runoff, the United States having an infant mortality rate that is 71% higher than the global average for developed countries, and a less than ideal healthcare system which leaves many with little or no insurance.
26. High Wage Policies – 4.1
The United States for much of recent history had the highest per capita GDP in the world, before the rise of oil-rich and finance-driven countries with very low populations skewed such data. Regardless, the United States is still considered the richest country in the world as its citizens earn some of the highest wages in the world, which drives the world’s most economically demanding populace.
These high wages contribute to a robust economy and feed a self-reinforcing cycle of wealth creation, though they do come with drawbacks and recent developments. The United States has not been able to fully insulate its citizenry from the dichotomy exists between its high-wage society and the cheap labor throughout the rest of the world. The decline and collapse of many domestic manufacturing industries has borne a wide variety of socio-economic problems, though these are relative in a country where the poverty line still implies food, shelter, and multiple televisions and smartphones per household. Alternatively, wage growth has been stymied for the better part of a century in the United States, with corporate profits and GDP growth belying weak wage growth and a growing divide between the rich and poor. In spite of these issues, the United States high wages yield it a very high score in this category, held back only by the stagnancy of the wage rate.
27. Environmental Protection - 3.5
Until the recent Paris Climate Accords, the United States had one of the most robust and far-reaching environmental regulation regimes in the world. As one of the first countries to embrace industrialization and one of the primary beneficiaries of global capitalism, the United States began to lead the charge on environmental protections in the early 1900’s with the establishment of national parks to protect and preserve natural resources, and again in the 1970’s with the passing of the Clean Water Act and the establishment of the Environmental Protection Agency, one of the largest agencies in the federal government. These agencies and the policies they are tasked with have been wildly successful in improving environmental conditions and protections, both within the United States and in the global community. This progress, however, comes at the cost of reducing wealth creation to a certain degree, with the potential for even further economic harm if more stringent policies are deemed necessary.
Several decades later, the United States is still leading the charge in the development and proliferation of environmentally responsible technologies and policies. Despite recent political movements that are staging a backlash at environmental regulations that put the United States at a disadvantage with much of the rest of the world, the protection of the environment has become a deeply ingrained value in the majority of the US which yields its relatively high score in spite of contentious political debates that may indicate otherwise.
28. Strong Army – 5.0
The United States has, by far, the most powerful and advanced military in the history of human civilization. A century of leading the global battle for the Western values of democracy and capitalism has empowered it with both a relentless military-industrial complex that is decades if not a full century away from being equaled, as well as a web of military alliances that span the entire globe. Here, the US receives its highest mark as the strength and ubiquity of its military and technological advantages have played almost as large a role in its economic prosperity as the inherent power of capitalism itself.
29. Foreign Trade Impact- 4.3
Although the United States’ also has the world’s largest trade deficit, which in 2017 stood at negative $578.4 billion, this massive shortfall is in large part due to the incredible demand in the US for cheap, foreign-made goods and oil. While the US at many points in the 1970’s and 1980’s had a trade surplus, it has been running a deficit since the early 90’s which exploded into an all-time low of -$678 billion in 2006 before settling into an average of $445 billion throughout the late 2000’s and 2010’s. This coincided with the influx of cheap foreign-made goods that came from the economic and manufactural development of many East Asian countries that are now net exporters to the US.
Though there are obvious negative impacts on the US GDP, employment, and wealth creation as a whole, it is in fact a sign of the overall prosperity of the United States that it relies so heavily on the flow of goods and services to satiate domestic demand which allows valid points to be made that such a deficit actually benefits wealth creation by increasing quality of life and reducing the costs of goods. Domestic outcry at the consequences of such a deficit has led to a popular movement in the United States to renegotiate trade deals and impose tariffs with the goal of “leveling the playing field” for US businesses, the results of which have yet to be determined.
30. Management of Foreign Currency Budget - 2.1
With an approximate foreign currency reserve worth $42.8 billion as of March 2018, the United States did not even come close to cracking the top 10 list of nations with the largest forex reserves. This list stretches from Singapore, with foreign currency reserves worth $279.8 billion, to China, whose reserves amounted to over $3.16 trillion. Luckily, the United States does not need to keep such massive surpluses, as the dollar is the most stable currency in the world, reducing the need to maintain large foreign currency reserves.
When it comes to its balance of payments, however, the United States’ deficit of $426 billion is the world’s largest. Though this has obvious negative consequences for wealth creation in the US, hence the low score, its interpretation only highlights the wealth of US businesses and citizens, who purchase vast amounts of foreign goods as a means of increasing their quality of life at the cost of domestic economic growth.
31. Layers of Collective Action - 3.0
The United States has one of the world’s most robust variety of collective enterprises, rates of civic involvement, and traditions of accomplishment and leadership. A culture of political action, solid foundation of clearly defined locally elected bodies, and a healthy oversaturation of volunteer groups not only contributes to a stream of experienced leaders but also, in theory, powerful mechanisms for accountability that reinforce the aforementioned elements of US society.
However, the political evolution of the United States brought with it changes to the constitutional foundations of its government, and has resulted in a status quo where local and state elected governments are deeply reliant on the federal government for funding and political direction. This is balanced, to some degree, by an unrelenting culture of skepticism, individualism, and a federated system in which large portions of the country, on both sides of the aisle, contribute to healthy collective action. However, taken as a whole, the United States’ layers of collective neither largely detract nor contribute to wealth creation.
Patterns of Interest Group Involvement in National Politics.” Journal of Politics 63(4): 1191-1213.
32. Pro-Business Climate - 3.9
The business climate in the United States seems to have two faces. On the one hand, a deeply ingrained culture of free markets and free minds has imbued the citizenry with an appreciation and desire for wealth creation, the fostering of businesses and profits, and great national pride in the advancement of GDP and other key economic indicators. Historically, the United States government has embraced this culture both domestically, by advertising and governing itself as the premier destination for businesses and products, and internationally, by spreading democracy and capitalism and lifting billions out of poverty by doing so.
On the other hand, an underlying and increasingly prevalent disdain for laissez-faire economics and wealth itself has given rise to powerful forces that advocate and legislate for regimes that are far less conducive to business and wealth creation than what the United States has historically been associated with. A cultural backlash towards the increasing disparity between rich and poor has seen volunteerism increase and applications to business school decrease. Irrespective of the moral and long-term economic validity of either approach, this movement has given way to a current economic climate that is significantly less business-friendly than what it once was.
33. Government Enterprises – 3.7
Operating under the assumption that this is limited to government-owned business entities such as those colloquially known as Fannie Mae and Freddie Mac, the US is fortunate to have clearly defined rules of law regarding government-owned entities as well as a political culture that would be highly reluctant to fall into the traps of government-owned enterprises, such as those that have caused a wide array of issues in nations such as China and Brazil. Where government-owned enterprises are prevalent, they often act as market disruptors and lightning rods for corruption and gross misspending, because of the complex relationship that would exist in such an entity existing in a capitalist system, not to mention the ripe opportunities for misuse. Presumably, rather than having government-owned entities such as Petrobras in Brazil, which resulted in money being funneled through it to illegally enrich politicians and fund political campaigns, the United States legal and political attitude towards government-owned entities mean it would rather treat them as it did Fannie Mae and Freddie Mac. That is, in some cases by taking conservatorship in private entities in dire need of such assistance that is also central to the functioning of the economy, and in others establishing such entities with clearly defined barriers to full governmental ownership and the pitfalls therein. In this case at least, the massive and normally unacceptable subsidies these entities needed, to the tune of well over $116 billion plus over $250 billion in debt liabilities, resulted in their stabilization and, ultimately, profitability, which allowed the invested money to be recouped.
34. International Security Agreements - 5.0
Though current events may give the impression of the opposite, the United States has been the paragon of security and diplomacy for much of recent history, and almost 100 years of alliance building has cemented its role as both a global hegemon and a trusted ally. Hitherto unbreakable bonds with most of the world’s richest and most powerful nations, such as the United Kingdom, much of the European Union, Japan, and Australia, have allowed US firms and its citizenry to establish, grow, and globalize their business with the utmost confidence with respect to the potential for war and international instability. As such, it can be said that the US’s security agreements are as conducive to wealth creation as any country in the world, though this obviously excludes international trade agreements, that while overwhelmingly beneficial to the country and world at large, are not as conducive to US wealth creation as they are for the world at large.
35. Protection of Domestic Enterprises from Government Mandated Costs – 1.9
While many proponents of “government mandated costs” argue that their benefit to society outweighs their deadweight loss, heavy regulation can hamper an economy on both the individual level, with higher costs for goods and services, and for businesses, who can either close shop or establish themselves in countries with less stringent rules and regulations. It also remains that small businesses, which comprise over 97% of all US firms, are the ones most affected by the burden of modern regulation. This cost is amplified by the fact that small businesses account for roughly 65% of private-sector net job creation, highlighting that while a significant portion of the current regulatory regime plays a key role in managing the economy and balancing external costs, constant additions of red tape may have a greater and more tangible impact on the US economy and its citizens.
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