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Policies are principles put in place by the government to help guide them in making decisions so as to achieve desired outcomes. The States employ many strategies to help them bring about economic growth and development, as well as, increase the productivity levels of the country. This paper will focus on strategies employed by the United States government to influence economic progress and productivity. It will also assess whether each of the policies has improved or weakened the people’s quality of life. Approvals that might advance these policies will also be made.
The most pressing challenge currently in the US is unemployment. Throughout the President Obama’s reign, unemployment rates have averaged 8.8%. The high unemployment rates have resulted in the government putting policies in place so as to encourage increment of jobs which reduces unemployment. Such policies include improvement of the infrastructure. Through improved infrastructure, jobs are created, and this helps to reduce the unemployment rate and hence would lead to economic growth. Improvement in infrastructure also contributes to increased productivity. It is estimated that an increase in infrastructure investment by about 250 billion dollars per year would, in turn, increase productivity by about 0.3% annually. This increase is higher than half the increment of productivity of the US economy.
Another challenge experienced in the US is the rising inequality in income distribution among Americans. Increased inequality had led to increased productivity and economic growth, not reflecting an increase in most people’s standards of living. It has led to the President Obama’s administration employing an economic policy of tax increase on the wealthiest Americans. The policy focuses on ensuring that the wealthiest people are taxed more as compared to the middle and lower class. As a result, inequality in income levels is reduced as those who earn more pay higher taxes. High taxation of high-income earners helps to promote economic growth as it aids in the stabilization and improvement of the people’s living standards .
Free trade is another policy the US government has enforced to impact on economic growth and productivity. (NAFTA) North American Free Trade Agreement is one way through which the American government seeks to enhance free trade in the United States. The treaty permits the free movement of goods from one state to the other. It thus allows states to concentrate on the production of goods on which they have an absolute or comparative advantage. They later trade with other states to acquire the products they don’t have. Free trade thus helps to increase productivity as well as economic growth.
Education is another sector in which the government has invested. They have policies in that sector that help increase economic growth as well as productivity. A good example is an investment in early childhood education, increase salary for teachers as well as offering student loans. It helps improve the quality of education which in turn increases, innovations and job opportunities. It contributes to reducing unemployment as well as increase people’s living standards. All this translates into increased economic growth and productivity.
All the discussed policies are working as originally proposed. They have helped improve the living standards of the people. Employment has also increased, although a lot still needs to be done to reduce the unemployment rate. The government obtains more taxes from taxing the wealthiest Americans and tax is used to improve other economic sectors. It has led to reduced inequality in income distribution, although a significant gap still exists. Free trade had resulted in the specialization and thus increased productivity and economic growth. However, this has led to increased immigration into the US. The quality of education has also increased. However, frequent strikes by teachers due to their promised increased pays have been experienced.
There are several recommendations regarding the above-discussed policies that can help improve the policies. They include; regulation of free trade such that it does not favor some while making others worse off. It entails guiding people into making the right decisions regarding what to trade in. States should be guided to major in the production of production in which they have a comparative advantage as compared to other states. It increases productivity as well as economic growth. Also, the government should focus more on policies that help to reduce unemployment. The unemployment rate is till high and thus, something ought to be done to reduce it.
References
Bivens, J. (2014). The Short - And L Ong- Term Imp Act Of Infrastructure Investments on Employment And Economic Activity In The U.S. Economy. Washington: Economic Policy Institute.
Taylor, R., Kern, D., & Crawford, J. (2012). Economic Policy And The Current U.S. Recovery. Journal of Business Administration.
