When people think of the United States, many think about its growing problems: political polarization, public debt and rising income inequality. Compared with many western economies, the US suffers from insufficient investment in its ailing infrastructure, and appears unable to rein in its galloping health and Social Security costs. Although the Bureau of Labor Statistics reports the unemployment rate has recently dropped to 6.7%, the rate slid in part because people retired or just dropped out of the workforce. Our public debt is over the $17 trillion mark. We are heavily indebted to China, our political and economic rival. Our students are falling behind their Chinese counterparts.
While one could add even more concerns to the above list, some key fundamentals of the US economy counter this gloomy outlook and point to a promising future.
First, the US energy revolution is a game changer. By 2020, the US is projected to be the world’s largest oil producer and could be energy independent by the same year. The strategic implications of this transformation cannot be overestimated. The availability of relatively cost-efficient energy without political risks and with certainty of continued supply will further a burgeoning re-industrialization trend in the US – with all the positive implications that this brings for the labor market, incomes and debt reduction.
The oil boom is also likely to attract producers from across the world to the largest market with the greatest purchasing power on earth. This could add up to 4% to annual GDP and create 1.7 million new jobs.
On education, while our primary and secondary schools rank behind many of our economic rivals, the US post-secondary education system is second to none. We are home to 17 of the world’s top 20 universities. The United States has won more Nobel prizes for chemistry, physics, physiology or medicine and economics since WWII than any other country by a wide margin.