The Economy & You #41: The Future of the U.S. Economy – My View (Part I)
As Americans, we have experienced the turmoil of our national economic downturn. Many have felt the effects first-hand of high unemployment and the stagnancy of the economic recovery. This has led many policy makers to believe that we are now experiencing a “new normal” involving the general weakness and malaise of our economy. While I agree that many states are facing difficult fiscal issues, I cannot agree that our current situation will become the “new normal” and there a number of reasons to support this position.
While the economic downturn has affected many states, there are a handful of states that have avoided the downturn and are showing strong growth. Alaska, Montana, North Dakota, Texas, Utah, and Wyoming have had 8% job growth over the past decade, and another 22 states have shown some employment increases as well when compared to 2001.
We must understand that the notion of inevitable slow growth is not the future fate of our nation. The data shows that the U.S. is seeing a strong increase in agricultural and energy production, a rebound in manufacturing, and an unrivaled reign in technological innovation. These factors, along with demographics and foreign investment, are strong indicators that the U.S. is poised to return to its strong position as a world economic powerhouse.
One of our nation’s inherent advantages is that we are a resource rich country. The ability to feed ourselves and much of the world is a critical piece of our competitive advantage in the global economy. Countries with food surpluses like the U.S., Australia, Brazil and Canada have intrinsic advantages that allow these countries to focus their resources on other areas of economic growth instead of having to direct resources to feed their people. I would argue that agricultural self-sufficiency is the most critical component for a strong nation. China may be considered a manufacturing giant but its inability to feed its own people is a critical weakness in its ability to grow.
Another example of how America is a resource rich nation is in the energy sector. In the last half of the 20th century, the United States became a major importer of oil. The continuous and rising costs of oil imports transferred billions (if not trillions) of dollars out of the U.S. economy and did little to encourage jobs in the domestic energy sector. Now because of new and improved technologies (horizontal drilling, fracking, etc.), energy resources have shot through the roof. Oil, gas and coal resources are transforming the U.S into a leading energy producer. In 2011, the U.S. became a net exporter of petroleum products for the first time in 62 years. The boom in the energy sector has been a major part of economic growth in states like North Dakota, Texas and Wyoming.
The recession and the gradual recovery have left some believing that America’s greatest days are over. I do not believe that. The United States has weathered this economic storm and indications that our ability to feed our people and the world, and our new efforts to become more self-sufficient regarding energy will help to strengthen our economic foundation. This will lead to a resurgence of America as the leading global economic power.
In my next article, I will outline how the transformation of our manufacturing sector, our technological edge, and the consistent influx of money and labor from other countries will not only bring the U.S. economy out of its current downturn, but propel it to the dominant economic player in the world.
- Federal energy data chief says crude exports would boost economy (fuelfix.com)
- Harvard Study Predicts World Oil Production at 110 million barrel per day in 2020 (nextbigfuture.com)
- Housing, Domestic Oil May Boost U.S. Growth, Pimco Says – Bloomberg (bloomberg.com)