Key Issues in the Long-Term Growth of the US Economy

Abstract

The US economy in the 21st century continues to grow along the traditional trajectory, faces old and new problems, experiences external shocks and internal socio-economic difficulties. But the country is growing faster than the European Union and is striving to maintain its leadership in the field of scientific and technological progress. The level of welfare is growing, although the gap between the wealthy strata and the bulk of the population is not diminishing. The electoral process in a two-party political system regularly exacerbates debates on key economic policy issues, resulting in a constantly difficult search for compromises. The 2024 election, which ended with the victory of Donald Trump and the Republican Party, illustrates a significant split in the electorate’s (and elites’) views on social and economic policy and heralds new changes in the way the country’s key challenges are addressed.

The 21st century is not an easy one for the United States and its elites: the country has overcome several severe crises and is undergoing a complex interparty struggle. The presidents of this quarter century have represented very different strands of thought and action. The next administration inherits a significant set of complexities, including high inequality, environmental problems, aging infrastructure, and rising public debt.

The constant sources of benefits for the US economy are the significant inflow of low-cost labor from Latin America and huge capital investments from outside into the US economy. In the last decade, the country has started to actively use industrial policy methods. All this gives high rates of economic growth against the background of other developed countries. But deep social inequality is built into the country’s economic model, even with overall income growth.