Economy of the United States

Economy of The United States

Currency United States Dollar (USD)

Fiscal year 1 October – 30 September

Trade NAFTA, WTO, OECD, G-20, G8 and others

organizations

Statistics

GDP $14.266 trillion (2009)[1] (nominal; 1st)

$14.266 trillion (2009)[1] (PPP; 1st)

GDP growth -2.4% (2009)[2]

GDP per capita $46,442 (2009)[1] (nominal; 17th) $46,442 (2009)[1]

(PPP; 6th)

GDP by sector agriculture: (1.2%), industry: (21.9%), services:

(76.9%) (2009 est.)

Inflation (CPI) 2.3% (March 09-10)[3]

Population 13.2% (2008)[4]

below poverty line
Gini index 45 (List of countries)

Labor force 154.5 million (includes unemployed) (2009 est.)

Labor force farming, forestry, and fishing 0.6%, manufacturing,

by occupation extraction, transportation, and crafts 22.6%,
managerial, professional, and technical 35.5%, sales
and office 24.8%, other services 16.5% note: figures
exclude the unemployed (2007)

Unemployment 9.9% (April 2010)[5]

Main industries petroleum, steel, motor vehicles, aerospace,

telecommunications, chemicals, creative industries,
electronics, food processing, consumer goods,
lumber, mining, defense

External

Exports $1.057 trillion f.o.b (2009 est.)[6]

Export goods agricultural products (soybeans, fruit, corn) 9.2%,

industrial supplies (organic chemicals) 26.8%, capital
goods (transistors, aircraft, motor vehicle parts,
computers, telecommunications equipment) 49.0%,
consumer goods (automobiles, medicines) 15.0%
(2009)

Main exportCanada, 13.2%; Mexico, 8.3%; China, 4.3%; Japan,

partners 3.3%. (2009)[7]

Imports $1.558 trillion c.i.f. (2009 est.)[6]

Import goods agricultural products 4.9%, industrial supplies 32.9%

(crude oil 8.2%), capital goods 30.4% (computers,
telecommunications equipment, motor vehicle parts,
office machines, electric power machinery), consumer
goods 31.8% (automobiles, clothing, medicines,
 furniture, toys) (2009)

Main importChina, 15.4%; Canada, 11.6%; Mexico, 9.1%; Japan,

partners 4.9%; Germany, 3.7%. (2009)[7]

FDI stock $2.398 trillion (31 December 2009 est.)

Gross external$13.77 trillion (30 June 2008)

debt

Public finances

Public debt $12.28 trillion (January 2010)[8] 84% of GDP

Revenues $2.106 trillion (2009)[9]

Expenses $3.515 trillion (2009)[9]

Economic aid ODA $19 billion, 0.2% of GDP (2004)[10]

Main data source: CIA World Fact Book

All values, unless otherwise stated, are in US dollars
Throughout this article, the unqualified term "dollar" and the $ symbol refer to the US
dollar.
The economy of the United States is the world's largest nominal economy.[11] Its nominal
GDP was estimated at $14.2 trillion in 2009, which is about three times that of the world's
second largest national economy, Japan.[2] Its GDP by PPP is almost twice that of the second
largest, China. The U.S. economy maintains a very high level of output per person (GDP per
capita, $46,442 in 2009, ranked at around number ten in the world). Historically, the U.S.
economy has maintained a stable overall GDP growth rate, a low unemployment rate, and high
levels of research and capital investment funded by both national and, because of decreasing
saving rates, increasingly by foreign investors. In 2006, consumer spending made up 70 percent
of the United States Gross Domestic Product.[12]
Since the 1960's, the United States economy absorbed savings from the rest of the world. The
phenomenon is subject to discussion among economists. Like other developed countries, the
United States faces retiring baby boomers who have already begun withdrawing from their
Social Security accounts; however, the American population is young and growing when
compared to Europe or Japan. The United States public debt is in excess of $12 trillion and
continues to grow at a rate of about $3.83 billion each day.[13]
The American labor market has attracted immigrants from all over the world and has one of the
world's highest migration rates. Americans have the highest income per hour worked.[14] The
United States is ranked second, down from first in 2008-2009 due to the economic crisis, in the
Global Competitiveness Report.[15] The country is one of the world's largest and most influential
financial markets, home to major stock and commodities exchanges like NASDAQ, NYSE,
AMEX and CME.

Contents
• 1 History
○ 1.1 After the Great Depression
• 2 Overview
• 3 Education
• 4 Immigration
• 5 Employment
• 6 Income and wealth
• 7 Sectors
○ 7.1 Energy
○ 7.2 Agriculture
○ 7.3 Manufacturing
○ 7.4 Finance
• 8 International trade
• 9 Economic predictions and forecasting
• 10 Currency and central bank
• 11 Government involvement
○ 11.1 Regulations
○ 11.2 Taxation
○ 11.3 Expenditure
• 12 See also
• 13 References
• 14 External links

History
Main article: Economic history of the United States
The economic history of the United States has its roots in European settlements in the 16th, 17th,
and 18th centuries. The American colonies went from marginally successful colonial economies
to a small, independent farming economy, which in 1776 became the United States of America.
In 180 years the United States grew to a huge, integrated, industrialized economy that still makes
up over a quarter of the world economy. The main causes were a large unified market, a
supportive political-legal system, vast areas of highly productive farmlands, vast natural
resources (especially timber, coal and oil), a cultural landscape that valued entrepreneurialism, a
commitment to investing in material and human capital, and at times a willingness to exploit
labor. In addition, the U.S. was able to utilize these resources due to a unique set of institutions
designed to encourage utilization and extraction.[citation needed] As a result, the U.S.'s GDP per capita
converged on that of the U.K., as well as other nations that it previously trailed economically.
The economy has maintained high wages, attracting immigrants by the millions from all over the
world.[16]
In the 19th century, recessions frequently coincided with financial crises. Because of the great
changes in the economy over the centuries, it is difficult to compare the severity of modern
recessions to early recessions.[17] Recessions after World War II appear to have been less severe
than earlier recessions, but the reasons for this are unclear.[18] The Depression of 1893 was one of
the worst in American history with the unemployment rate exceeding 10% for half a decade.[19]
After the Great Depression
For many years following the Great Depression of the 1930s, when the danger of recession
appeared most serious, the government sought to strengthen the economy by spending heavily
itself or cutting taxes so that consumers would spend more, and by fostering rapid growth in the
money supply, which also encouraged more spending. In the 1960s, economic woes brought on
by the costs of the Vietnam conflict, major price increases, particularly for energy, created a
strong fear of inflation. As a result, government leaders came to concentrate more on controlling
inflation than on combating recession by limiting spending and tightening credit.[citation needed]
Ideas about the best tools for stabilizing the economy changed substantially between the 1930s
and the 1980s. From the New Deal era that began in 1933, to the Great Society initiatives of the
1960s, national policy makers relied principally on fiscal policy to influence the economy. The
approach, advanced by British economist John Maynard Keynes, gave elected officials a leading
role in directing the economy, since spending and taxes are controlled by the U.S. President and
the Congress. The economy and living standards grew strongly during this era, but a period of
high inflation, interest rates and unemployment after 1973 weakened confidence in fiscal policy
as a tool for regulating the overall pace of economic activity, and instead, a combination of loose
monetary policy and record budget deficits, both financed partly with foreign direct investment,
became prominent as tools for reigniting economic growth after 1981.[citation needed]
The U.S. economy grew by an average of 3.8% from 1946 to 1973, while real median household
income surged 55% (or 1.6% a year).[4][20] The economy since 1973, however, has been
characterized by both slower growth (averaging 2.7%), and nearly stagnant living standards, with
household incomes increasing by 10%, or only 0.3% annually. [4] The worst recession in recent
decades, in terms of lost output, occurred during the 2008 financial crisis, when GDP fell by
3.9% from the spring of 2008 to the spring of 2009. Other significant recessions took place in
1957–58, when GDP fell 3.7%, following the 1973 oil crisis, with a 3.1% fall from late 1973 to
early 1975, and in the 1981–82 recession, when GDP dropped by 2.9%.[2][21] Recent, mild
recessions have included the 1990–91 downturn, when output fell by 1.3%, and the 2001
recession, in which GDP slid by 0.3%; the 2001 downturn lasted just eight months.[21] The most
vigorous, sustained periods of growth, on the other hand, took place from early 1961 to mid
1969, with an expansion of 53% (5.1% a year), from early 1991 to late in 2000, at 43% (3.8% a
year), and from late 1982 to mid 1990, at 37% (4% a year).[2]
Since 1976, the US has sustained trade deficits with other nations, and since 1982, current
account deficits; the nation's long-standing surplus in its trade in services was maintained,
however, and reached US$140 billion yearly in 2008 and 2009. In recent years, the primary
economic concerns have centered on: high household debt ($11 trillion, including $2.5 trillion in
revolving debt),[22] high net national debt ($9 trillion), high corporate debt ($9 trillion), high
mortgage debt (over $15 trillion as of 2005 year-end), high unfunded Medicare liability ($30
trillion), high unfunded Social Security liability ($12 trillion), high external debt (amount owed
to foreign lenders), high trade deficits, a serious deterioration in the United States net
international investment position (NIIP) (-24% of GDP),[23] and high unemployment.[24] In 2006,
the U.S economy had its lowest saving rate since 1933.[25] These issues have raised concerns
among economists and national politicians.[26]
The United States economy experienced a crisis in 2008 led by a derivatives market and
subprime mortgage crisis, and a declining dollar value.[27] On December 1, 2008, the NBER
declared that the United States entered a recession in December 2007, citing employment and
production figures as well as the third quarter decline in GDP. [28] The recession did, however,
lead to a reduction in record trade deficits, which fell from $840 billion annually during the
2006-08 period, to $500 billion in 2009,[2][6] as well as to higher personal savings rates, which
jumped from a historic low of 1% in early 2008, to nearly 5% in late 2009.[29]
In 1968, the U.S. public debt was $909 billion - or an amount equal to 33.3% of America's gross
domestic product (GDP). By 1990, that number had more than tripled to $3.2 trillion - or 55.9%
of GDP.[30] In 2001 the national debt was $5.7 trillion. [31] On January 28, 2010, the US debt
ceiling was raised to $14.3 trillion dollars.[32] Based on the 2010 U.S. budget, total national debt
will grow to nearly 100% of GDP, versus a level of approximately 80% in early 2009. [33] The
White House estimates that the government’s tab for servicing the debt will exceed $700 billion
a year in 2019,[34] up from $202 billion in 2009.[35]
The U.S. Treasury statistics indicate that, at the end of 2006, non-US citizens and institutions
held 44% of federal debt held by the public.[36] China, holding $801.5 billion in treasury bonds, is
the largest foreign financier of the record U.S. public debt.[37]
The U.S. economy maintains a relatively high GDP per capita, with the caveat that it relies partly
on extensive borrowing and a low to moderate population growth rate; during periods of higher
economic growth rates, this combination has made the nation attractive to immigrants
worldwide.[citation needed]
Overview

United States wealth compared to the rest of the world in the year 2000
Year-on-year change in total net worth of US households and nonprofit organizations 1946-
2007, unadjusted for inflation or population change.
A central feature of the U.S. economy is the economic freedom afforded to the private sector by
allowing the private sector to make the majority of economic decisions in determining the
direction and scale of what the U.S. economy produces.[38] This is enhanced by relatively low
levels of regulation and government involvement,[39] as well as a court system that generally
protects property rights and enforces contracts. From its emergence as an independent nation, the
United States has encouraged science and invention.[40]
The United States is rich in mineral resources and fertile farm soil, and it is fortunate to have a
moderate climate. It also has extensive coastlines on both the Atlantic and Pacific Oceans, as
well as on the Gulf of Mexico. Rivers flow from far within the continent, and the Great Lakes—
five large, inland lakes along the U.S. border with Canada—provide additional shipping access.
These extensive waterways have helped shape the country's economic growth over the years and
helped bind America's 50 individual states together in a single economic unit.[41]
The number of workers and, more importantly, their productivity help determine the health of the
U.S. economy. Throughout its history, the United States has experienced steady growth in the
labor force, a phenomenon that is both cause and effect of almost constant economic expansion.
Until shortly after World War I, most workers were immigrants from Europe, their immediate
descendants, or African Americans who were mostly slaves taken from Africa, or slave
descendants.[42] Beginning in the early 20th century, many Latin Americans immigrated;
followed by large numbers of Asians following removal of nation-origin based immigration
quotas.[43] The promise of high wages brings many highly skilled workers from around the world
to the United States. Over 13 million people entered the United Stated during the 1990s alone.[44]
Labor mobility has also been important to the capacity of the American economy to adapt to
changing conditions.[citation needed] When immigrants flooded labor markets on the East Coast, many
workers moved inland, often to farmland waiting to be tilled. Similarly, economic opportunities
in industrial, northern cities attracted black Americans from southern farms in the first half of the
20th century, in what was known as the Great Migration.
In the United States, the corporation has emerged as an association of owners, known as
stockholders, who form a business enterprise governed by a complex set of rules and customs.
Brought on by the process of mass production, corporations, such as General Electric, have been
instrumental in shaping the United States. Through the stock market, American banks and
investors have grown their economy by investing and withdrawing capital from profitable
corporations. Today in the era of globalization, American investors and corporations have
influence all over the world. The American government is also included among major the
investors in the American economy. Government investments have been directed towards public
works of scale (such as from the Hoover Dam), military-industrial contracts, and the financial
industry.
While consumers and producers make most decisions that mold the economy, government has a
powerful effect on the U.S. economy in at least four areas, as the government uses a capitalist
system. Strong government regulation in the U.S. economy started in the early 1900s with the
rise of the Progressive Movement; prior to this the government promoted economic growth
through protective tariffs and subsidies to industry, built infrastructure, and established banking
policies, including the gold standard, to encourage savings and investment in productive
enterprises. On June 26, 2009, Jeff Immelt, the CEO of General Electric, called for the United
States to increase its manufacturing base employment to 20% of the workforce, commenting that
the U.S. has outsourced too much in some areas and can no longer rely on the financial sector
and consumer spending to drive demand.[45]
Education
Main article: Education in the United States
There are 4,352 colleges, universities, and junior colleges in the United States.[46] In 2007,
Americans stood second only to Canada in the percentage of 35 to 64 year olds holding at least
two-year degrees. Among 25 to 34 year olds, the country stands tenth. The nation stands 15 out
of 29 rated nations for college completion rates, slightly above Mexico and Turkey.[47] According
to government data, one-tenth of students are enrolled in private schools. Approximately 85% of
students enter the public schools.[48]
Immigration
Main article: Immigration to the United States
As of 2009, the United States received 4.31 immigrants per 1000 people, ranking 25th globally.
[49]
In fiscal year 2009, 1.1 million immigrants were granted legal residence.[50]
Employment
Further information: List of U.S. states by unemployment rate

Unemployment rate as a percentage of the labor force in the United States according to the U.S.
Bureau of Labor Statistics.
In May 2009, the unemployment rate was 9.4%.[51] A broader measure of unemployment (taking
into account marginally attached workers, those employed part time for economic reasons, and
discouraged workers) was 15.9%.[52] In 2009 and 2010, following the financial crisis of 2007–
2010, the emerging problem of jobless recoveries resulted in record levels of long-term
unemployment with over 6 million workers looking for work longer than 6 months as of January,
2010. This particularly affected older workers.[24]
In April 2010, the official unemployment rate was 9.9%, but the government’s broader U-6
unemployment rate was 17.1%.[53] In the period between February 2008 and February 2010, the
number of people working part time for economic reasons has increased by 4 million to 8.8
million, that is a 83% increase in part time workers during the two year period. [54]
Female unemployment continued to be significantly lower than male unemployment (7.5% vs.
9.8%). The unemployment among African-Americans continues to be much higher than white
unemployment (at 14.9% vs. 8.6%).[51] The youth unemployment rate was 18.5% in July 2009,
the highest July rate since 1948.[55] 34.5% of young African American men were unemployed in
October 2009.[56] Officially, Detroit’s unemployment rate is 27%, but Detroit News suggests that
nearly half of this city’s working-age population may be unemployed.[57]
Income and wealth
Main articles: Income in the United States and Wealth in the United States
See also: Personal income in the United States, Household income in the United States, Income
inequality in the United States, Poverty in the United States, Affluence in the United States, and
Homeownership in the United States
According to the United States Census Bureau, the pretax median household income in 2007 was
$50,233. The median ranged from $68,080 in Maryland to $36,338 in Mississippi.[58]
In 2007, the median real annual household income rose 1.3% to $50,233, according to the
Census Bureau.[59] The real median earnings of men who worked full time, year-round climbed
between 2006 and 2007, from $43,460 to $45,113. For women, the corresponding increase was
from $33,437 to $35,102. The median income per household member (including all working and
non-working members above the age of 14) was $26,036 in 2006.[60]
The recently released US Income Mobility Study showed economic growth resulted in rising
incomes for most taxpayers over the period from 1996 to 2005. Median incomes of all taxpayers
increased by 24 percent after adjusting for inflation. The real incomes of two-thirds of all
taxpayers increased over this period. Income mobility of individuals was considerable in the U.S.
economy during the 1996 through 2004 period with roughly half of taxpayers who began in the
bottom quintile moving up to a higher income group within 10 years. In addition, the median
incomes of those initially in the lower income groups increased more than the median incomes of
those initially in the higher income groups.[61]
Between June 2007 and November 2008, Americans lost an estimated average of more than a
quarter of their collective net worth.[62] Since peaking in the second quarter of 2007, household
wealth is down $14 trillion.[63] The Fed also said that at the end of 2008, the level of outstanding
domestic nonfinancial debt was $33.5 trillion, including household debt valued at $13.8 trillion.
[64]

Sectors
Main article: Economy of the United States by sector
Sales and employees by sectors of the United States economy in 2002.
Energy
Main article: Energy in the United States
The United States is the largest energy consumer in terms of total use, using 100 quadrillion
BTUs (105 exajoules, or 29000 TWh) in 2005. The U.S. ranks seventh in energy consumption
per-capita after Canada and a number of small countries.[65][66] The majority of this energy is
derived from fossil fuels: in 2005, it was estimated that 40% of the nation's energy came from
petroleum, 23% from coal, and 23% from natural gas. Nuclear power supplied 8.4% and
renewable energy supplied 6.8%, which was mainly from hydroelectric dams although other
renewables are included.[67]
American dependence on oil imports grew from 24% in 1970 to 65% by the end of 2005. At the
current rate of unchecked import growth, the US would be 70% to 75% reliant on foreign oil by
the middle of the next decade.[68] Transportation has the highest consumption rates, accounting
for approximately 68.9% of the oil used in the United States in 2006, [69] and 55% of oil use
worldwide as documented in the Hirsch report.
Agriculture
Main article: Agriculture in the United States
See also: Fishing industry in the United States, Beekeeping in the United States, and United
States Department of Agriculture
Agriculture is a major industry in the United States and the country is a net exporter of food. The
United States controls almost half of world grain exports.[70]
Products include wheat, corn, other grains, fruits, vegetables, cotton; beef, pork, poultry, dairy
products; forest products; fish.
Manufacturing
Main article: Manufacturing in the United States
The United States is the world's largest manufacturer, with a 2007 industrial output of US$2.69
trillion.
Main industries include petroleum, steel, motor vehicles, aerospace, telecommunications,
chemicals, electronics, food processing, consumer goods, lumber, and mining. A total of 3.2
million – one in six U.S. factory jobs – have disappeared since the start of 2000.[71]
Finance
Main articles: Finance in the United States, Banking in the United States, and Insurance in the
United States
The New York Stock Exchange is the largest stock exchange in the world by value of its listed
companies' securities.[72] As of October 2008, the combined capitalization of all domestic NYSE
listed companies was US$10.1 trillion.[73]
NASDAQ is another American stock exchange. It is the largest electronic screen-based equity
securities trading market in the United States. With approximately 3,800 companies and
corporations, it has more trading volume per hour than any other stock exchange in the world.[74]
International trade
Main articles: Foreign trade of the United States and Trade policy of the United States
The United States is the world's largest trading nation. Since it is the world's leading importer,
there are many U.S. dollars in circulation all around the planet. The dollar is also used as the
standard unit of currency in international markets for commodities such as gold and petroleum
(the latter sometimes called petrocurrency is the source of the term petrodollar). Large foreign
economies such as China, Japan, Arab states of the Persian Gulf, and the EU own huge dollar
reserves (especially as the US is more in debt) so there is a fear that they will move away from
the dollar.[75] China's reserves are more than $2 trillion, the world's largest.[76] China owns an
estimated $1.6 trillion of U.S. securities.[77]
In 2008, the total U.S. trade deficit was $695.9 billion,[78] which is $1.8 trillion in exports minus
$2.5 trillion in imports.[79] The deficit on petroleum products was $386.3 billion.[80] The trade
deficit with China was $266.3 billion, a new record and up from $304 million in 1983.[81] The
United States had a $144.1 billion surplus on trade in services, and $821.2 billion deficit on trade
in goods in 2008.[82]
In order to fund the national debt (also known as public debt), the United States relies on selling
U.S. treasury bonds to people both inside and outside the country, and in recent times a growing
percent of buyers are international.
Economic predictions and forecasting
Predictions about the direction of the United States economy in the short term and long term are
crucial factors in determining federal government policies, business decisions, and Federal
Reserve decisions. Several institutions make economic predictions, including: Global Insight,
and the UCLA Anderson Forecast. Various state agencies, including the California Department
of Finance, also make predictions.[citation needed]
Currency and central bank
Main articles: United States dollar and Federal Reserve System

United States historical inflation rate 1666–2004

The United States dollar is the unit of currency of the United States. The U.S. dollar is the
currency most used in international transactions.[83] Several countries use it as their official
currency, and in many others it is the de facto currency.[84]
The federal government attempts to use both monetary policy (control of the money supply
through mechanisms such as changes in interest rates) and fiscal policy (taxes and spending) to
maintain low inflation, high economic growth, and low unemployment. A relatively independent
central bank, known as the Federal Reserve, was formed in 1913 to provide a stable currency and
monetary policy. The U.S. dollar has been regarded as one of the most stable currencies in the
world and many nations back their own currency with U.S. dollar reserves.
The U.S. dollar has maintained its position as the world's primary reserve currency, although it is
gradually being challenged in that role.[85] Almost two-thirds of currency reserves held around
the world are held in US dollars, compared to around 25% for the next most popular currency,
the Euro.[86] Rising US national debt and the related rise of China have led to some, especially the
Chinese, to call for replacing the dollar as the world's reserved currency, but thus far this has
been only speculation.[87]
The dollar used gold standard and/or silver standard from 1785 until 1975, when it became a fiat
currency.
Government involvement
Regulations
The U.S. federal government regulates private enterprise in numerous ways. Regulation falls into
two general categories.
Some efforts seek, either directly or indirectly, to control prices. Traditionally, the government
has sought to prevent monopolies such as electric utilities from raising prices beyond the level
that would ensure them extremely large profits. At times, the government has extended economic
control to other kinds of industries as well. In the years following the Great Depression, it
devised a complex system to stabilize prices for agricultural goods, which tend to fluctuate
wildly in response to rapidly changing supply and demand. A number of other industries—
trucking and, later, airlines—successfully sought regulation themselves to limit what they
considered as harmful price cutting, a process called regulatory capture.[88]
Another form of economic regulation, antitrust law, seeks to strengthen market forces so that
direct regulation is unnecessary. The government—and, sometimes, private parties—have used
antitrust law to prohibit practices or mergers that would unduly limit competition.[89]
Bank regulation in the United States is highly fragmented compared to other G10 countries
where most countries have only one bank regulator. In the U.S., banking is regulated at both the
federal and state level. The U.S also has one of the most highly regulated banking environments
in the world; however, many of the regulations are not safety and soundness related, but are
instead focused on privacy, disclosure, fraud prevention, anti-money laundering, anti-terrorism,
anti-usury lending, and promoting lending to lower-income segments.[citation needed]
Since the 1970s, government has also exercised control over private companies to achieve social
goals, such as improving the public's health and safety or maintaining a healthy environment. For
example, the Occupational Safety and Health Administration provides and enforces standards for
workplace safety, and the United States Environmental Protection Agency provides standards
and regulations to maintain air, water, and land resources. The U.S. Food and Drug
Administration regulates what drugs may reach the market, and also provides standards of
disclosure for food products.[90]
American attitudes about regulation changed substantially during the final three decades of the
20th century. Beginning in the 1970s, policy makers grew increasingly convinced that economic
regulation protected companies at the expense of consumers in industries such as airlines and
trucking. At the same time, technological changes spawned new competitors in some industries,
such as telecommunications, that once were considered natural monopolies. Both developments
led to a succession of laws easing regulation.[91]
While leaders of America's two most influential political parties generally favored economic
deregulation during the 1970s, 1980s, and 1990s, there was less agreement concerning
regulations designed to achieve social goals. Social regulation had assumed growing importance
in the years following the Depression and World War II, and again in the 1960s and 1970s.
During the 1980s, the government relaxed labor, consumer and environmental rules based on the
idea that such regulation interfered with free enterprise, increased the costs of doing business,
and thus contributed to inflation. The response to such changes is mixed; many Americans
continued to voice concerns about specific events or trends, prompting the government to issue
new regulations in some areas, including environmental protection.[92]
Where legislative channels have been unresponsive, some citizens have turned to the courts to
address social issues more quickly. For instance, in the 1990s, individuals, and eventually the
government itself, sued tobacco companies over the health risks of cigarette smoking. The 1998
Tobacco Master Settlement Agreement provided states with long-term payments to cover
medical costs to treat smoking-related illnesses.[93]
Taxation
Main article: Taxation in the United States
Taxation in the United States is a complex system which may involve payment to at least four
different levels of government and many methods of taxation. United States taxation includes
local government, possibly including one or more of municipal, township, district and county
governments. It also includes regional entities such as school and utility, and transit districts as
well as including state and federal government.
The National Bureau of Economic Research has concluded that the combined federal, state, and
local government average marginal tax rate for most workers to be about 40% of income. [94][95]
The Tax Foundation concluded that government at all levels will collect 30.8% of the nation's
income for 2008.[96] Tax Day, the day by which tax returns are due, is usually April 15.
Expenditure
Main articles: United States federal budget and United States public debt

Fiscal Year 2009 U.S. Federal Spending - Cash or Budget Basis.

Fiscal Year 2009 U.S. Federal Receipts.
The United States public sector spending amounts to about a third of the GDP.
Each level of government provides many direct services. The federal government, for example,
is responsible for national defense, backs research that often leads to the development of new
products, conducts space exploration, and runs numerous programs designed to help workers
develop workplace skills and find jobs (including higher education). Government spending has a
significant effect on local and regional economies—and even on the overall pace of economic
activity.[citation needed]
State governments, meanwhile, are responsible for the construction and maintenance of most
highways. State, county, or city governments play the leading role in financing and operating
public schools. Local governments are primarily responsible for police and fire protection.[citation
needed]

Overall, federal, state, and local spending accounted for almost 28% of gross domestic product in
1998.[97]
As of January 20, 2009, the total U.S. federal debt was $10.627 trillion (an increase of 85.5
percent over the previous eight years).[98] The borrowing cap debt ceiling as of 2005 stood at
$8.18 trillion.[99] In March 2006, Congress raised that ceiling an additional $0.79 trillion to $8.97
trillion, which is approximately 68% of GDP.[100] Congress has used this method to deal with an
encroaching debt ceiling in previous years, as the federal borrowing limit was raised in 2002 and
2003.[101] As of October 4, 2008, the "Emergency Economic Stabilization Act of 2008" raised the
current debt ceiling to US$ 11.3 trillion.[102]
The federal government's debt rose by almost $1.4 trillion in 2009, and now stands at $12.1
trillion.[103] While the U.S. public debt is the world's largest in absolute size, another measure is
its size relative to the nation's GDP. As of 2009 the debt was 83 percent of GDP. This debt, as a
percent of GDP, is still less than the debt of Japan (192%) (the overwhelming number of owners
of JGBs are Japanese)[104] and roughly equivalent to those of a few western European nations,
including Greece.[105] The total debt is projected to continue increasing significantly during
President Obama's administration to nearly 100% of GDP, its highest level since World War II.
[106]
Some projections put public debt at 200% of GDP by 2038.[107]
Bruce Bartlett estimates that Medicare and Social Security are facing a combined unfunded
liability of $106.4 trillion. Nation's total private net worth is $51.5 trillion, according to the
Federal Reserve.[108]
See also
• Affluence in the United States
• Energy policy of the United States
 • Economic history of the United States
• Economy of Puerto Rico
• Household income in the United States
• Income inequality in the United States
• Income in the United States
• Labor unions in the United States
• National debt by U.S. presidential terms - includes federal spending and GDP
• Personal income in the United States
• United States federal budget
• Wealth in the United States
Events:
• Late-2000s recession
• Proposed bailout of U.S. financial system (2008)
• Subprime mortgage crisis
• Oil price increases since 2003
Lists:
• List of industry trade groups in the United States
• List of United States companies
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External links
• CIA - The World Factbook - United States
• Outline of the U.S. Economy[dead link]
• Bureau of Economic Analysis: Selected NIPA tables (Lots of U.S. economic data)
• U.S. Economic Calendar
• U.S. Census Bureau
• U.S. Dept of Labor - Bureau of Labor Statistics
• U.S. Dept of Commerce - Bureau of Economic Analysis
• FRB: Z.1 Release-- Flow of Funds Accounts of the United States, Release Dates
• OECD's United States country Web site and OECD Economic Survey of the United
States
• U.S. Energy Information Administration
• National Bureau of Economic Research (USA) Economics material from the organization
that declares Recessions and Recoveries.
• Bureau of Labor Statistics–from the American Labor Department
• US Department of Commerce Economics Statistics
• The Heritage Foundation: Understanding Poverty in America
• GDP growth viz Savings rate since 1985 Comparing GDP growth rate with the Savings
rate since 1985
• Gross Domestic Product Growth - USA
• Unemployment Rate - USA
• Consumer Price Index - USA
• Dollars & Sense
• A U.S.-Colombia Free Trade Agreement: Strengthening Democracy and Progress in
Latin America
• "Why There Won’t Be a Revolution" by Jerry Adler, Newsweek, February 16, 2009