Five Major Problems with the American Economy
October 6, 2014
Economist Peter Morici reports that America's official unemployment rate is 6.1 percent, but that official number is highly misleading. Between the staggering number of Americans who have given up on work, the number of workers who want full-time jobs but are stuck in part-time positions and the number of students enrolled in graduate school only because of bleak job prospects, the U.S. labor market is suffering.
What is the true unemployment rate? Morici places the number closer to 20 percent. The economy has grown just 1.7 percent each year since 2000, half the rate of growth that the country experienced under Presidents Reagan and Clinton.
Morici gives five reasons why Americans are struggling in the weak economy:
- World Trade Organization rules aim to limit the ability of countries to manipulate their currencies to gain advantage over others, yet President Obama as well as his predecessor, President Bush, have not sought enforcement of these rules, despite China having undervalued its currency in order to flood American markets with cheap goods.
- The United States could become energy-independent and see millions of new jobs if it would allow domestic production of oil off of America's coasts as well as in Alaska, but instead it has placed limits on exploration and production.
- The highest corporate tax rate in the world is imposed by the United States, which also imposes regulations on businesses that carry large costs. These policies only encourage American companies to relocate and discourage investors from investing in the United States.
- Washington policies are peppered with special interests, limiting competition by giving privileges to favored companies. This only hurts consumers, creates inefficiencies and limits innovation.
- America's public welfare system discourages work, yet the system only continues to expand. Immigrants are the ones benefiting from new job creation, because welfare programs discourage low-skilled Americans from taking such jobs.
Source: Peter Morici, "Five Reasons Americans Can't Find Jobs," Real Clear Politics, October 1, 2014.
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