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Challenges Facing the U.S

(University Affiliation)

As Chafuen (2016) posits, despite being one of the most powerful economies in the world, the U.S.A still faces a myriad of challenges ranging from social, political, to economic issues. For instance, the U.S is currently facing issues associated with unemployment. Moreover, the country’s interest rates still remain near historical lows. In effect, this paper will delineate the rising unemployment rates, inequality, de-industrialization as well as debt issues. All the above challenges are associated with U.S unregulated economy, which went into free fall in 2008. Ultimately, the paper will also highlight issues exacerbated by hyperpartisanship and gridlock.

The global financial crisis that faced the United States in the fall of 2008 is still vivid in the memories of the Americans and more so, its effects are still being felt in today’s America. Several authors have associated the 2008 economic crisis with flawed government policy as well as unscrupulous personal and corporate behaviours in America. One major indicator which proves that America is still facing an economic crisis is the fact that the U.S has experienced a rise in the unemployment rate for last seven years (Tobin, 2015). Moreover, in situations where there has been a fall in the unemployment rates, the moment is often short-lived. For instance, the unemployment rate had dropped from 5.1 % in October 2015, to 4.9% in January 2016 (, 2016). However, it burgeoned again to 5.0 % in April 2016 (, 2016). The same applies to the previous years are well. Further statistics released by United States Bureau of Labor Statistics (2016) indicates that more than 160,000 employees lost their jobs between January and April 2016 due to downsizing strategies carried out by the respective employers. The study also indicates that the rate of unemployed Hispanics group increased by 6.1 percent (U.S. Bureau of Labor Statistics, 2016).

The other main challenge being faced by the U.S.A is inequality. As Michael Norton and Dan Ariely (2011) once stated, if the poor in the U.S knew how rich, wealthy individuals are, there would be an incessant uproar in the streets. Surprisingly, a study conducted by Norton and Ariely (2011) indicates that the top twenty percent of American households own nearly 84% of the U.S wealth. On the other hand, the bottom forty percent combines for a paltry 0.4% (Norton & Ariely, 2011). For instance, the Walton family is richer than 43% of the U.S families when combined together. In other words, the top quintile is associated with 32% while the bottom two quintiles attribute to 25%. It is now evident that even the wealthy, believe that there is inequality in America and hence something needs to be done in order to change the status quo and facilitate an equal distribution of resources.

More aggravatingly, a different study conducted by Norton and Kiatpongsan (2011) showed that the CEO-to-employee pay-ratio is 355-to-1. This is far different from the median American estimation of 30-to-1. This indicates a society, whose inequality rates are burgeoning by over 200% as the ratio fifty years ago was 20-to-1 (Norton and Ariely (2011).Norton and Kiatpongsan (2011) also gathered that the patterns were similar for all the subgroups irrespective of the political affiliation, pay, age, education as well opinion on inequality.

The U.S debt crisis can be dated back to the War of 1812 as well as both the World War I and II, where the country had to borrow a significant amount of money to use it in wars (Mian & Sufi, 2015). The worst deficit crisis hit the country in 1933 when the world experienced the Great Depression and during this period, U.S deficit hit a peak of 6.7% of the GDP (Mian & Sufi, 2015). Conversely, the deficits for 2010, 2012 and 2015 have all surpassed 8.7% (Mian & Sufi, 2015). Today, the American debt stands at a staggering $11.5 trillion and this equivalent to approximately $38,000 for each citizen in America (Mian & Sufi, 2015). Sadly, the debt is expanding by more than $1 trillion annually. It should be noted that financial forecasts believe that the debt mountain could worsen in the coming year if the trend continues or if nothing is done to improve the economy. As Mian & Sufi (2015)asserts, the current massive debt is frustrating the President’s efforts as well as Congress with regards to dealing with recession threats. The stimulus, as well as bailout spending combined with lower tax revenues, is also widening the debt gap.

Looking at recent studies, it is evident that employment in the manufacturing industry for the last twenty-five years has dramatically fallen in the United States, a phenomenon widely known as “deindustrialization”(Rodrik, 2015). Certainly, deindustrialization has brought about economic inequality as well as increase in the unemployment rates. According to Rodrik (2015), the declining share with regard to employment in manufacturing sector in the U.S is one primary indictor closely associated with deindustrialization. This is because deindustrialization means that the country is experiencing a dramatic decline in the share of manufacturing value added associated with the country’s Gross Domestic Product (GDP). Studies are now showing that a significant number of factories, which can be estimated to be in tens of thousands, have left America to other countries such as China and Japan in the last decade (Rodrik, 2015). Consequently, apart from the loss of thousands of jobs, the U.S is now consuming a considerable number of imported products and yet it is increasingly producing very little which is unhealthy for the economy.

The other major challenge facing America is the gridlock. As Randon HersHey and Beck, (2015) postulates, the Obama administration has suffered a great deal with regards to implementing its policies due to the Republicans on Capitol Hill, who would want to obstruct everything that President Obama has wanted to push through. Sometimes the Republicans both in the House and Senate have irrationally opposed rational policies such as the Obamacare just for the sake of being controversial. With the a sequence of political gridlock, the country is left behind by other advanced economies since the system in the United States is turning to be a battle between the Democrats and Republicans instead of competing in terms of ideologies and how to improve the quality of American lives. Even at one time President Obama posited that he was sure that if he was to champion a bill affirming apple pie American, it could as well fall victim to prejudiced politics. The concept of gridlock in America is making it difficult for important economic decisions that would help the country lower its debt as well as unemployment statistics to be made.

Related to political gridlock is the issue of hyper-partisanship in America. According to a study conducted by Pew Research Poll, over 78% of Americans are frustrated, fed up as well as disgusted with the failure of the Congress and the President to tackle fundamental issues facing the nation such as unemployment and corruption as well as the rising federal debt (Blumenthal, 2014). The Federal Government is so polarized such that critical appointments, as well as basic legislation, are virtually difficult. Today, studies indicate that Americans are constantly discriminating on the basis of gender, race and other divides hence this indicates how the issue of hyper-partisanship is hurting the country’s developmental agendas.

In summation, the paper has management to highlight some of the most significant issues or challenges that America is facing today. Even though the country is faced with a myriad of political, social, economic and religious issues, the above-delineated problems are the fundamental and such need quick solution if the country is to remain a superpower globally.


Blumenthal, M. (2014). Polls, forecasts, and aggregators. PS: Political Science & Politics, 47(02), 297-300.

Chafuen, A. (2016). Forbes Welcome. Retrieved 21 May 2016, from theu-s-economy-in-2016/#26373d994ba8

Kiatpongsan, S., & Norton, M. I. (2014). How much (more) should CEOs make? A universal desire for more equal pay. Perspectives on Psychological Science, 9(6), 587-593.

Mian, A., & Sufi, A. (2015). House of debt: How they (and you) caused the Great Recession, and how we can prevent it from happening again. University of Chicago Press.

Norton, M. I., & Ariely, D. (2011). Building a better America—One wealth quintile at a time. Perspectives on Psychological Science, 6(1), 9-12.

Randon HersHey, M., & Beck, P. A. (2015). Party politics in America.

Rodrik, D. (2015). Premature deindustrialization. Journal of Economic Growth, 1-33.

Tobin, J. (2015). The new economics one decade older. Princeton University Press.

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