If you also want to know why is America so rich then you have come to the right place this post is made just for you. Keep reading this post you’re incomplete. Why is America so rich? You will all get the answer to this question
Does this post mention several important points that will help you understand why is America so rich?
America the land of the free and home of the rich how did the US amass such a sturdy wealth to become the world’s largest economy by nominal GDP and net wealth. some say the US wealth is a result of being the oldest free market or the most international currency,
Or because it has such a mixed economy does this play a part or do Americans work harder have more military spending or pay less tax perhaps it’s the fact us is the largest importer and the second-largest exporter,
Or is it because of democracy or because they have the second-largest PPP aka purchasing power parity there are endless options to choose from and even more right answers the USA is so rich?
1. Natural Resources
First things first the USA is playing with a full hand that’s for sure they have the seventh-highest total estimated value of natural resources as of a 2015 estimate this was valued at 45 trillion dollars,
One of the greatest resources is energy-producing oil and gas reserves making the USA energy independent on top of this advantage of not relying on anyone else’s pricey fuel,
they’re the largest producers of petroleum and natural gas and therein lies a cha-ching where other countries nationalize natural resources America allows private ownership of land and mineral rights
this has helped the rapid development of fracking to access these natural resources we aren’t going to get into the politics of ancestral land rights or the environmental impact that’s an entirely different topic on its own this Post just points out some of the ways Why is America so rich?
2. War is Big Business
War is one of the oldest businesses of all time since caveman Ron opened up his first skull clubbering chain store people have been making money from the art of war,
And nothing could be truer than for the USA the u.s department of defense is the largest employer in the world with 3.2 million employees as of 2015.
So that adds a lot of employed consumers to the country with salaries to pay taxes from and to spend then there’s the task of uniforms equipment housing transport catering and communication for this massive workforce.
All of this creates business opportunities aside from the u.s forces early on the u.s government got into the international war loan business realizing that war is expensive.
The American government made loans available to European states since the first world war as the European states weakened the American economy was bolstered with new business in the lone game.
The second world war offered even more opportunity to us and because their country’s infrastructure was uniquely protected from the devastation of war by the Atlantic between them and Europe they retained their industry and infrastructure when European nations had to rebuild.
3. Unhindered Labor Markets
The US has excellent ease of access between workers and joys, they don’t have restrictive labor regulations or state-owned enterprises that make the process of job-seeking difficult.
They also don’t have a lot of large trade unions that make staffing complicated and might put off company setting up an industry in the country.
This, in turn, keeps employers in the country which adds to the economy while the lack of unions does have effects on working conditions that can negatively affect workers those problems are still brought into the public space and are improving slowly as consumers drag corporations online and stage boycotts for poor labor practices.
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4. A System That Encourages Entrepreneurs
America has long been described as the land of opportunity and while that may or may not be true it does encourage people to take any opportunity they see and make a business of it.
Fostering an entrepreneurial culture is central to American economic growth there are no penalties or stigmas around trying and failing in business in USA culture.
Endless American success stories in the tech energy fashion and entertainment industries all prove this of course though it takes money to make money and the united states financial system is set up to assist entrepreneurs in this way.
The USA equity finance system is more developed than other countries and their decentralized banking system lends to helping entrepreneurs at a local level,
The country boasts more than 7 000 individual small banks as well as having angel investors and venture capitalists with an appetite to invest in new ideas.
5. Working Culture
Despite excellent resources and other forms of income, you’d be surprised to know that 50 of US GDP comes from income tax a working population is important to keeping the country rich.
America has a culture of hard work and long hours in Germany the average person works 1400 hours a year wherein in the USA this figure is more like 1800 hours annually.
Yes some Asian countries boast over 2,200 hours a year you might say but 1800 is pretty high the u.s tax-transfer system also encourages increased earnings instead of penalizing it which is a big incentive for many,
In 2019 the per capita wealth grew by 13 a lot of this is owed to the fact that wealthy Americans saved their tax cuts of the OECD member state American citizens have the highest average households,
And employee income ranks ahead of Switzerland and japan but in terms of wealth equity, they are not top of the class.
6. Invention Innovation and Scientific Research
The US doesn’t mess around when it comes to its world-class research universities these lend to scientific breakthroughs tech startups and innovation that all lead to new business holding patents and licensing for new technology is also a great way to bring in the bacon,
There’s a large overlap between universities and businesses that attracts top talent from around the world and the USA knows how to leverage this talent for their gain.
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7. Internal Competition for Business
Fostering competition on home soil is a large part of what keeps us so wealthy, the decentralized political system encourages states to compete for investment from business and property owners
This competition drives states to set their own taxation and laws that work to attract business and residents while protecting their resources and citizens as required
Some states offer no income tax or limit unions with their labor laws others offer quality education and low fees for in-state students at local universities this decentralized system is unique amongst developed nations but it’s an integral part of how the US remains wealthy.
8. Manufacturing and Services
With all the business it drums up and the employment it creates us has a huge population of consumers although there’s a large discrepancy between the mega-rich and the low-income earners today.
We’re discussing the effect this general consumer power has on making the US so rich before exporting a single item the US has the largest internal market for goods and services trade,
In 2018 combined u.s trade totaled 4.2 trillion dollars what’s more remarkable for a western nation is that they’re the second largest manufacturer in the world,
So plenty of the goods consumed are US brands the US manufactures a fifth of the global manufacturing output,
You stuck with us until the end, of course, you’re getting a bonus does democracy play a part in the US changes leadership between the democrats and the republicans every four to eight years,
Adam Davidson’s article in the new yorker explains that the democrats promised to ensure the economic growth advantages everyone not just the rich while the republicans believe that only they hold the key for economic growth,
The truth is they both play a part it’s the very fact they have a healthy democratic system that changes powers every few years that drives the consistent growth what matters more than whether Trump or Obama is in power is general political stability,
Democratic rule of law and a civil-led military with a bit of freedom of speech and movement thrown around for good measure neither party alone has the magic formula to build a superpower.