Domestic Economic Policy
Gloomy assessments of its condition, prospects, and relative decline notwithstanding, the American economy remains the largest and most efficient in the world. Since the oil price shocks of 1973 and 1979, the United States has achieved higher rates of output growth than many other industrial countries, but smaller improvements in productivity. Having averaged about 2.4 per cent between 1890 and 1973, the annual rate of growth in productivity (defined as output per hour of all persons working in the non-agricultural business sector) fell to 0.7 per cent between 1973 and 1990. Output growth in that period was mainly a function of increased inputs, especially of hours worked and increased participation by women in the labour force. New waves of immigrants entered labour markets, too. During the 1980s, the United States created more jobs than any of its major competitors; the corollary was that real wages stagnated. Between 1990 and 1995, however, productivity grew at about 2 per cent per annum, and then rose sharply to 3.5 per cent between June 1994 and June 1995, before reverting to the long-term trend rate. Measuring productivity is more difficult than it was because of the continued relative decline of American manufacturing and the growth in services (manufacturing now accounts for only 18 per cent of US GDP compared to more than 30 per cent in the 1950s, whereas services now account for 55 per cent of GDP).
KeywordsPermeability Economic Crisis Transportation Income Assure
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- The web-sites run by the Office of Management and Budget, and the Congressional Budget Office, contain a wealth of statistical detail in Presidential budget proposals and Congressional budget legislation.Google Scholar
- Congressional Quarterly Weekly Report and National Journal provide detailed accounts of the authorization and budgetary processes. Collender produces an annual Guide to the Federal Budget which is an essential reference. The best account of the reform of budgetary law in the 1970s is in Sundquist’s The Decline and Resurgence of Congress. Hogan provides an assessment of the effectiveness of those reforms in his article “Ten Years After: the US Congressional Budget and Impoundment Control Act of 1974”, in Public Administration, vol. 63, no. 2 (1985). Other sources on the politics and procedures of the budget are Savage’s Balanced Budgets and American Politics and Stein’s Presidential Economics. Mr Reagan’s bout of tax-cutting and aggregate budget increases are addressed by Stockman in his badly-written but revealing account, The Triumph of Politics, by Penner in his edited collection, The Great Fiscal Experiment; and by Friedman in Day of Reckoning. The history of the budgetary process is the subject of Stewart’s Budget Reform Politics, Fisher’s Presidential Spending Power, and of Schick’s Congress and Money. Monetary policy is examined in Mayer’s edited book, The Political Economy of American Monetary Policy, and by Woolley in Monetary Politics. Greider’s Secrets of the Temple is a sensational but entertaining account of Federal Reserve perfidy during the 1980s. Berman’s The Office of Management and Budget and the Presidency, 1921–1979 provides a good account of the development of that key institution within the Executive Office of the President. Brownlee’s edited collection Funding the Modern American State, 1941–1995 contains much important scholarship on the history of taxation and public finance.Google Scholar