US economic reform can assist the Federal government in United States to attain its goals and further enhance its global presence. The country believes that in providing equal opportunities and freedom to the people of United States of America.
People should also be given a fair chance in several spheres related to health care, education, social services, economic opportunities, better living standards and also make provision for the generations to come. To promote the above theory into a phenomenon, the US President introduced the Millennium Challenge Account or the MCA.
As per the MCA program, any country, which decides to be self sufficient is given a reward. In the year 2004 to 2005, approximately USD$2.5 billion was the amount of the MCA fund. The program envisages that countries ought to run the nation in a just manner, raise voice against deceitful practices, make the market more liberalized, eliminate any barrier, which hinders entrepreneurship. Owing to crisis in the economy of many industrial nations during the 1970s, many US economic reforms were implemented in the country.
During the period when President Jimmy Carter held office from 1977 to 1981, reforms which were market friendly were executed.
During the same period, the country witnessed the deregulation of railways, transportation, airways, telecommunication and many other sectors of the economy. However, there were few economists who criticized this move of the government to deregulate the above spheres of the economy. The reason being that deregulation has certain loopholes too, which affects the economy in the long run.
It leads to:
People losing their jobs
Quality of the services being offered gets affected and generally deteriorates.
The weaklings are usually eliminated. As such there is little competition in the market.
The process of deregulation stops extending services to the consumers, which are not beneficial economically.
Since weaklings are removed, it leads to the private sector prying in for entry.
Other areas of US economic reform also focused on the labor market in the country. During the tenure of President Ronald Reagan, labor unions were given a cold shoulder. Consequently, their power also decreased.
The essence of the US economic reforms during this period marked the era of the private sector developing anti union policies. US economic reform also consisted of changes in the US tax policies, governing taxation system in the country.
Another prominent area of US economic reform was the change in the monetary policies. Paul Volcker after being nominated as the Federal Reserve chairman took up a challenge to battle inflation. The US economic reform comprising changes in the monetary policies included enhancing the interest rates for a short term.
This was mainly done to exercise control over money supply. This was accompanied by recession and consequently there was a drop in the rate of inflation in the country.
Last Updated on : 26th June 2013