The Business Economy in Corporate America
written by: jasonwriter2
When the U.S sneezes the rest of the world catches a cold. America’s economy contributes about 25% to the global GDP with consumer spending and manufacturing being the major drivers of America’s growth. The abundance of natural resources, strong infrastructure, and advanced technology gives the United States the hallmarks of a strong economic power house with a whopping $19.42 trillion GDP. America has also tremendously recovered from the financial crisis in 2007 recording an average steady growth of about 1.5% year over year in its GDP growth. Over the past six months since Donald Trump took office, the prospects of economic and business growth in America has tremendously improved. The American economy recorded 209,000 new jobs in July this year which was a second-month subsequent growth with the unemployment rate being at a 10 year low. Additionally, the financial markets have also hit new all time highs raising investors prospects about America’s economy.
Donald Trumps expansionary policies have largely contributed to improving the business environment which overall has had a ripple effect in American economy. Manufacturing companies such as Mazda and Toyota will soon build plants in America totaling to about $1.6 billion contribution to the American economy. The direct impact of this is the creation of more jobs estimated to be 4000 in the American Manufacturing sector. In addition to this, the weak dollar bill compared to a basket of G10 currencies, has largely contributed to improved business environment particularly for American companies with sales in overseas countries.
Despite the positive growth Americas economic watchdog, the Federal Reserve, may have to raise rates to keep pace with Trumps expansionary policies while at the same time reach their inflation target of 2%. In addition to this, Trumps next focus would be on corporate tax cuts. There’s no doubt that Trump’s proposal of corporate tax cuts will massively improve the corporate profits creating a snowball effect on the economy. However, the tax reform may get quite hard to enact particularly because of the senate budget reconciliation policies requiring tax cuts to be neutral to revenue. For economic growth, the tax reforms proposed by Trump during his campaign should reduce the burden on the rich while at the same time providing relief to the middle class who largely contribute to the labor. Critics have pointed that Trumps tax cuts would actually increase the gap between the rich and the poor since this would actually put more money into the pockets of the 10% super rich.
The huge debt and a growing budget deficit weights the U.S down. However, the business and economic prospects of America remain positive owing to Trumps expansionary fiscal policies.