US Economy Affects World's,| Worlds Biggest Economy| King Of Currencies|US Slapped Penalties On China

 US Economy Affects World's, | World's The Biggest Economy| King Of Currencies|US Slapped Penalties On China

1) World's Biggest Economy

 Let’s talk about the world’s biggest economy because it affects just about everyone. Depending on what you read the US economy is well on the way to recovery after the crisis caused by COVID-19.

The whole world is trying to get back on track. But how long that will take depends a lot on the Americans. So who really created the strong US economy before the pandemic hit?

Is the recovery starting to slow? And is inequality getting worse — not better?

2) By some measures China these days is considered the biggest economy in the world. But when you look at the value of all its goods and services the United States is still No. 1. So what is the American economy? 

It’s Silicon Valley Hollywood oil manufacturing finance. It’s pretty mixed. The US is also the most important export destination for a fifth of all countries. That’s because Americans consume a lot. So much that they’re the engine of the US economy. And it all ripples throughout the fabric of the global economy.

King Of Currencies-Dollar

Another reason the US economy matters to all of us is that the US dollar is the undisputed king of currencies. Most global transactions and trading in things like oil and gold are done in US dollars .It wasn’t always that way. Countries used to settle international transactions in gold. 

But after World War Two countries needed more flexibility to rebuild their economies and chose to peg their currencies to the dollar. That’s because the US had the most gold at the time. A strong dollar can be good or bad depending on who you are.

Japan needs the dollar to be stronger against the yen so American consumers can afford more Japanese products. But a country like Turkey would rather a weaker US currency because banks and businesses there hold a lot of debt in dollars. 

In other countries a strong dollar can fuel inflation. In Argentina that pushes up prices for basic things like food. And in the US a strong greenback makes imported goods cheaper but it can harm US manufacturers by making their goods more expensive abroad. Overall, though, the dollar is largely seen as a safe currency.

During the pandemic it actually rose. Lately the US dollar has gone up and down. That has to do with all sorts of things. Even a tweet from President Trump can help or hurt the exchange rate. But a lot of rides on how the US economy performs. So how is it doing?

Economies Are Measured Using GDP

Economies are measured using GDP. which is the total value of goods and services produced in that country over a period of time. And you can see that over the last 10 years the US economy has been growing. Last year GDP rose by just over 2%. But it took a while to get there. Like the rest of the world the US economy was devastated by the financial crisis in 2008.

President George W Bush started the clean-up shoring up banks and rescuing US companies. The Federal Reserve also played a massive role buying bonds and keeping interest rates low. And all that continued under President Barack Obama. Congress spent hundreds of billions of dollars on things like social security and tax relief.

The Longest Economic Expansion On Record

By 2009 the US had started its longest economic expansion on record. Then President Donald Trump stepped in. The economy did keep growing. But the 4-to-6% boost he promised well, that didn’t happen. Trump added his own touch. He cut regulations to make doing business easier and got Congress to pass tax cuts for American workers and corporations. The promise, there, was to help businesses  reinvest money to create jobs. But it didn’t always work that way.

A lot of those companies used those tax savings to buy back stocks and boost their value instead. Then there’s Trump’s trade policy of putting America first. He ripped up international trade deals saying they were unfair and hurt American manufacturing. And that led to a trade war.

US  Slapped Penalties On Hundreds Of Billions Of Dollars

The US slapped penalties on hundreds of billions of dollars’ worth of Chinese goods. China responded with their own. China also found ways around some of those tariffs. The main thing about Trump’s tenure was that the American public started to feel a lot better about the economy. And that had an important effect. So the economy was in good shape and the US jobs market was on fire. Then COVID-19 came along and pushed the economy off a cliff. The US economy slid 5% in the first quarter.

when it officially fell into recession. Then in the second quarter it nosedived at a record annual rate of more than 30%. The pandemic still isn’t over. But the focus now is on the economic recovery. In the third quarter of 2020 the economy bounced back a record 33%.

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