Sunday, November 3, 2024
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    Why is the United States economically superior to other rich countries?

    A recent report by The Economist discussed the economic superiority of the United States over other rich countries, noting that in the 1990s, the US Competitiveness Policy Commission predicted that the country's economy would suffer from slower growth compared to other industrialized countries over the foreseeable future.

    This assessment, according to the newspaper, reflected the growing concern at the time about the superiority of other economies such as and Europe.

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    But reality proved these expectations wrong. While Japan entered a long period of recession and growth slowed in Europe, the United States witnessed a mini-economic renaissance led by the Internet revolution.

    Today, despite new challenges and fears that the United States will lose its dominant economic position in light of the rise of China, the American economy has proven that it still outperforms its competitors, as it has grown at a faster pace than other advanced economies over the past three decades, according to the newspaper.

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    Better economic performance

    Since the beginning of 2020, before the COVID-19 , the US economy has recorded real growth of 10%, which is three times the average growth in the rest of the countries.

    According to the International Monetary Fund, the United States is the only G20 country whose economic output and employment figures exceeded pre-pandemic expectations.

    This economic dynamism has been reflected in the daily lives of Americans, as their travel and spending abroad have increased, reflecting the level of confidence in the domestic economy and its ability to provide opportunities and jobs, according to the same source.

    Dollar strength and increased confidence in the economy

    Economic growth in the United States was accompanied by the strengthening of the dollar's position as the dominant global currency.

    According to the Economist, a strong dollar means that American companies can easily enter into international and that foreign investors can trust American assets.

    This was evident in the large numbers of Americans traveling and spending record amounts outside the country, reflecting the high purchasing power of the dollar.

    Despite predictions a decade ago that China would overtake the US to become the world's largest economy, the reality is that China's has slowed, falling to about 65% of US GDP in 2024 from 75% in 2021.

    Geographical advantages and strong infrastructure

    Much of this success, according to The Economist, is due to the United States' geographic advantages. As a subcontinental economy spanning 50 states, American companies have easy access to a huge and diverse consumer market.

    This marketplace allows companies to quickly and efficiently launch their products or implement their ideas at scale, from California to Michigan and beyond.

    In addition, the United States has a large and integrated labor market that allows workers to move to better jobs and attracts the workforce to the most productive sectors.

    The United States' relatively open borders with Latin American countries are also a source of increased labor force, providing an influx of skilled labor for hard-working sectors such as agriculture and , which strengthens the U.S. economy.

    Growth boosted by friendly policies

    The success of the American economy, according to the Economist, is not limited to the advantages of the free market. Government policies have played a pivotal role in stimulating growth and promoting economic stability.

    In times of crisis, such as the 2007-2009 global financial crisis, the US government took aggressive action to revive the economy, such as cleaning up bank balance sheets and using monetary policy aggressively to support growth.

    During the slowdown of the COVID-19 pandemic, the government responded decisively by providing massive stimulus packages that helped the US economy recover at a faster pace than its counterparts in other countries, according to the newspaper.

    Although this financial support has contributed to the rise in global inflation, it reflects the government's willingness to intervene when necessary.

    Challenges and concerns about sustainability

    Despite strong economic performance, the United States faces significant challenges that reflect weaknesses in its economic model.

    For example, the average life expectancy of a newborn in the United States is 79 years, 3 years less than the average in Western Europe.

    This large gap reflects structural health problems such as high rates of obesity, widespread -related health crises, as well as problems related to gun and traffic accidents.

    The US is also not without social disadvantages such as economic inequality, as wealth distribution remains a major challenge despite strong growth.

    Future expectations

    Despite all these challenges, the United States has the unique advantage of economic dynamism, which is the primary driver of its continued growth.

    Despite domestic political volatility and fiscal deficit concerns, the United States remains able to meet challenges and outperform other world economies thanks to its ability to innovate and invest in human and natural resources, according to the Economist.

    This economic resilience represents the greatest hope for the continuation of American supremacy on the global stage, even in light of the increasing competition from emerging economies such as China and .

    Despite the challenges and growing concerns about the decline of the United States' economic power, the facts indicate that this country's economy is still able to deliver outstanding performance that outperforms its peers and continues to shape the face of the global economy thanks to its dynamism and flexibility.


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