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Seminar paper from the year 2009 in the subject Business economics - Economic Policy, grade: 1,3, Free University of Berlin (John F. Kennedy Institute for North American Studies), course: US Economic Policy, language: English, abstract: Despite the actual recession and financial crisis, the USA is currently the most competitive economy in the world. Competitive strengths like innovation and business sophistication next to well-functioning markets keep the USA highly productive. They outweigh the competitive weaknesses of great macroeconomic imbalances and improvable institutions. The financial market is just a part of the whole picture. Although the global economic landscape changed dramatically, the rise of emerging markets like China pose no general threat to U.S. competitiveness, because it is not a zerosum game. But the superior competitive position is eroding. Forces from within the U.S. economy put the future U.S. competitiveness at great risk. Inconsistencies like a decreasing percentage of R&D-spending, the ignorance of regional industry clusters by the federal government, the low-quality education system, and ineffective regulation of markets, display piecemeal, uncoordinated policy decisions and the lack of a coherent economic strategy. The formulation and implementation of a longterm economic strategy is recommended, which addresses these inconsistencies in the short- to midterm, the enforcement of strengths and reduction of weaknesses in the long-term. Only if the USA is governed strategically, it could sustain its current superior competitive position.
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