Robert Gordon and Erik Brynjolfsson
Introduction
A statement supported by the New York Times, it is evidence that the US economy is slowly going down and affirms to the arguments provided by Robert Gordon and Erik Brynjolfsson. In periods such as 2016, which incorporates several activities such as Trump’s Pitch, US growth has been at its slowest connected to aspects of a tight job market in addition to trade disruption. Among other core elements affirmed are fully stated by Robert Gordon who believes that regardless of an increase in productivity, technological advancements as well as innovations, various factors affirmed to the fact that US economy drastically goes downlinked to issues of high debt, unequal distribution of income, demographic shifts, and educations stagnation. In as much as the US government has turned out to explain how the US economy tends to grow, it is clear that the whole processes take a slower pace and that unspectacular growth is followed with aspects of gradual improvements (Gordon, 2014). The goal of this essay is to further provide information as to why the USA economy is slowly going down in addition to arguments provided by Robert Gordon.
One of the primary points that one would incorporate supporting a continuous sloppiness in the economy of the USA is linked to the US Gross Domestic Product percentage represented in 2016 and 2019. In 2016, the measurement of goods and services generated in the United States of America was 2.1% between October and December annual rates. Based on the Commerce Department preliminary report released out, in 2019 and 2018, the result was weaker ranging to 1.79% and that is an equivalent growth cycling of 2% (Brynjolfsson, 2014). In 2019 additionally, according to the report presented by Matthew Luzzetti from the Commerce Department of USA in relation to addressing Deutsche Bank Securities, it is clear that customers have pulled back in investments and spending in various business opportunities regardless incorporated as a result of advanced technology and innovations. An interview with one of the consumers illustrates that despite the various remarkable achievement the USA economy tends to undergo, one of the underpinnings connected to slow growth is fixed to unequal distribution of income depending on people from different societal classes.
Besides that, in as much as the U.S.A economy represents 20% of the global market making it larger than the China, market, one of the additional core factors that will necessitate its slow growth is the high debt issues. The sum of outstanding US debt as per Sep 2019 owned by the federal government is $22.7 trillion. Information tracked by the U.S Department of Treasury emphasizes that the outstanding figure tends to transform daily which has a high outcome to the future economy of the U.S. Two-third of the initiated debt other than being held by the public with the government owning that to buyers of U.S bonds, treasury bills, and notes, the remaining third of the intergovernmental debt will adversely affect its economy (Gordon, 2014). Generally, the above-mentioned debt is greater than the produce necessitated in the whole year. The idea is the high ratio in debt-to-gross domestic products might highly impact to problems connected to repaying such loans draining the agendas aiding to economic improvements.
Correspondingly, the U.S economy can slowly go down in relation to demographic shifts. Primarily, it has various implications for the economic policies and that variations in trends have an impact on economic rules and regulations. Demographic implications in the labor market, for instance, it has a high influence on the supply and consumption of products. As per the 1960s and 1970s, U.S experienced high rates of mortality which resulted to increase in labor however, as of 2010-2016; there has been lower population growth with a total estimation of 0.5%. In the long run, U.S labor has slowly been forced to go down (Brynjolfsson, 2014). And, as the key determinant for economic growth includes high population growth in addition to the labor force, failure to such elements as experienced in the United States of America currently will highly impact on labor productivity and capital input and output. A statement supported by the aging theory and applied in the world of economics in the U.S, demographic shifts indeed deter with structural productivity. With slow population growth, labor output measured per hour in relation to various economic platforms turns out at an average of 1% which brings in concerns of the great recession in the U.S in the upcoming years.
In conclusion, Robert Gordon and Eric Brynjolfsson’s explanation of different aspects of economics related to innovation and technological advancements in the USA are limited via several concerns. Among them include demographic shifts, high-debt, and educational education stagnation which limits efficient economic growth. It is therefore important for the USA to come up with strategies that will prevent such a process from taking place through the application of various frameworks that necessitate economic growth. Unless that happens then factors such as education stagnation will adversely continue to affect the U.S economy in its ability to reduce human capital resulting in decreased productivity in the economy’s output.
References
Gordon, R (2014 January 20). The demise of U.S. economic growth: restatement, rebuttal, and reflections. The Washington Post. Retrieved from http://apps.washingtonpost.com/g/page/business/the-demise-of-u-s-economic-growth-restatement-rebuttal-and-reflections/823/
Brynjolfsson, Erik. (2014, February). The key to growth? Race with the machines. [Video file]. Retrieved from http://www.ted.com/talks/erik_brynjolfsson_the_key_to_growth_race_em_with_em_the_machines#t-699439