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The modern national economy heavily depends on the international trade, which has been a huge contributor to the state wealth. Globalization has made it easy for countries to conduct business and have shared platforms for financial exchanges such as the stock markets. Many global economies have also developed economic integration through common markets that enabled various countries to trade as well as exchange goods and services thereby providing citizens from different states with access to the products, which originate from various parts of the world. Additionally, technology has induced economic growth both at national and international levels that has empowered many people and economies. It has become difficult to move forward and exert positive impact on the economy due to the challenges witnessed in various sectors of the economy. In current times, there is a number of challenges that have affected the United States. Moreover, serious implications arose both at the internal as well as external levels.
Cyber-Attacks
In this era of technology, the greatest threat to investments and business in any part of the world is the cyber-attacks. Cyber terrorist and hackers have worked their way into various technological platforms, and as cyber security experts, they keep elaborating new methods to overcome the danger posed by these hackers, while the latter are getting better at their business. Numerous businesses have been forced to spend billions of dollars to protect their operations from cyber-attacks. The threat of cyber-assault is so real that companies have to improve their security by means of the latest and the most sophisticated methods of protection to hinder the attackers causing breaches into the systems.
Moreover, data leak is closely linked with cyber-attacks since it can also be used by malicious people to expose the business unfairly hence creating a situation where information from an organization can be misused. Therefore, this will negatively influence operation of a corporation. Competitions can use leaked data from an organization against the success of that particular establishment thus suspending it from business.
Cyber-attacks is a serious national economic challenge because it directly or indirectly affects the country's GDP (Singer & Friedman, 2014). The first economic implication of cyber-attacks is that if the hackers succeed in hacking the systems that run a business then it would negatively influence the integrity of the firm, as many of the clients would easily refuse from the services of such companies. Therefore, this may lead to collapse of a venture that has other strong implications, which would include the loss of jobs by citizens and the loss of an important source of revenue by the government (Singer & Friedman, 2014). Apart from just destroying a corporation, cyber attackers have the tendency to steal from it by transferring funds from the firm or hijacking financial transactions thereby exposing the enterprise to the risk of losing its finances.
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Another way in which cyber-attacks affect the economy is the spending on protection of cyber-attacks. Billions of dollars that are normally allocated to protect businesses against these attacks would otherwise be used for more productive initiatives. In this sense, the threat of cyber- leads to overspending of money, which if spent differently can create more benefits to the company and hence steer the economic growth to greater heights.
However, it is important to note that despite that fact that cyber safety of business is expensive, it is the only solution. Any institution has to make certain that they have the best protection from cyber security threats because it is far much more detrimental if the cyber-attacks become successful. Moreover, corporations can take other precautionary measures such as securing that malicious programs are not installed into computers as well as ensuring that the networks used are well protected from any forms of breaches. Another way to safeguard from cyber-attacks is utilization of proper backups. Cyber-assaults can prompt the loss of corporate critical data that may paralyze the operations and therefore make it extremely difficult to run business. The backups that cannot be compromised can make it easy for firms to perform despite the threats from cyber-attacks. Consequently, the efficient solution is to ensure that some of the backups are offline so that they may not be accessed through the Internet, on which the hackers heavily depend.
Slow Economic Growth
The United States has taken time to recover from economic challenges that were occasioned by the economic recession witnessed in 2008. Despite the recession terminated in 2010, the challenges with regard to the job market were still not handled. Thus, this has led to significant delay of the economic development in the US (Boyce, Wood, & Brown, 2010). The United States is the country that hosts many people including immigrant workers, and its status of the global economic power is dependent on the industrial expansion. However, due to the fact that the nation has experienced slow growth, a great number people are jobless, and work opportunities have been reduced for both the US citizens and immigrants.
The decline in the job market in the USA caused weak expansion of the country's GDP hence affecting the general advancement of the national economy. The slow growth of the US economy has deeply impacted the companies that made organizations unable to. Therefore, the state employment rates increased dramatically (Boyce, Wood, & Brown, 2010). The implication increases, as the government also faces reduced revenue from these firms thus making it extremely hard for the authorities to focus on other important issues such as infrastructural development.
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The problem of slow economic growth has serious implication for the living standards of citizens, especially fresh graduates who enter the job markets for the first time. The young people with university degrees are forced to settle for jobs with low salaries while other are unemployed (Read, 2009). The high unemployment rates have put the government in the position where they have to pay for more services to the populace including unemployment benefits, medical aid benefits, and food stamps while at the same time contending with the fact that the receipt of taxes is low. Besides, this means that the government is required to spend more than it receives hence impeding the economy to progress since the expenditure is much more considerable than the revenue. In this instance, slow economic growth has crucial economic implications for all aspects of the economy.
The most important solution to dealing with the issue of economic decline in the US is providing more room for the idea of becoming more aggressive with the aim of winning new markets. The US has to make certain that it produces more and stabilizes production in various areas that are of strength so that they have best quality goods both domestically and internationally.
Domestic production should be increased to bolster different sectors of the economy. Proper market research can be done to secure that the products that are delivered to customers are those that they actually need. Hence, this is likely to help those involved in manufacturing to devote more efforts in producing the necessary items and improve their market share. Additionally, it is essential to ensure that there is proper partnership between the private and public sectors of the economy in order to promote production in the country.
Stiff competition With Global Economies
One of the biggest challenges that the US faces is the stiff competition with other developed economies including Chinese and European ones. The Chinese economy has been expanding much faster than that of the US. China has overtaken many European powers as an economic power, and in this context, the country has become the second largest global economy after America. China has also surpassed the US in terms of economic growth and has turned to one of the greatest global economies in this sense.
The advancement of the Chinese economy has resulted in the overtaking the markets that were previously controlled by the US thereby making China in charge of a large part of the market. The increased development of the Chinese presupposes the control over some of the areas that were managed by the US including parts of Africa and Asia. Therefore, it is hard for the US to continue running its traditional markets exclusively (Hachigian, 2014). The innovations, which appeared with the entrance of China into the global market prompted the delay in the growth of the US economy and caused serious implications for the American GDP and economic advancement.
The international competition has brought the international products from Europe and China to the US market. Thus, this increased internal competition, caused a significant decline of new industries and made the markets weaker. The fact that such countries as China that previously formed huge markets for the American products are now more industrialized also pose a challenge to the US economic growth rate. Consequently, the US economy progresses slowly hence inducing retardation of the US economy in terms of economic expansion.
The US still has a huge command of the international market and can work closely with competitors through friendly market policies in order to open new markets for the American products. Moreover, the US can cooperate with various countries where it is likely to sell its goods so as to ensure that the products availed in these markets resonate with the needs of potential consumers. In addition, economic integration with the states that are involved in trade with the US may be strengthened to secure that the US economy has better chances for development. Therefore, people will obtain more opportunities to get jobs, and businesses will advance both at the domestic and international levels.
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Financial Stress
Financial stress that normally causes economic depression can be attributed to a number of factors that have led to this particular challenge. Some of the issues that have resulted in the financial stress include crisis in the banking sector due to credit crunch, changes in the prices of oil, fluctuations in the global stock market exchange, as well as financial inflation and deflation.
The financial stress has been a major challenge in the modern period leading to considerable uncertainty with regard to the global economy. The most recent development that as created serious difficulties to the national economy is the instability of international oil prices. Many financial institutions and investors have lost a lot of many owing to the unstable international oil prices. Lowering oil prices has resulted in significant reduction in investments and has also greatly affected investor confidence, a factor that is likely to prompt strong financial implications in the market (Wright, Frantz, & Geddes, 2015). Under ordinary circumstances, the decrease of oil prices always boosts the improvement of the global economy. However, the recent reduction of the oil prices has been so drastic that various banks have lost a lot of money by investing in oil companies; therefore, this induced serious implications in the world economy.
Furthermore, there are cases where some of the uncertainties concerning the factors that lead to financial stress make it difficult for people to invest and make substantial financial contribution to the economy. Consequently, financial stress makes it extremely hard for the economy to advance at a normal rate while exposing the country to other challenges by impacting the living standards and lowering incomes.
To deal with financial stress the US has to understand the implications for various sectors of the economy (Read, 2009). All the factors that cause financial stress vary and thus cannot be together at one level, but rather each challenge is handled in the unique way depending on its implications.
As one of the most important sources of energy, oil influences national and global economy in general. Hence, it is important to work towards ensuring the usage of the alternative sources of energy, which facilitate development of the economy. Alternative energy such as solar, wind, or geothermal and nuclear energy, are essential in managing the uncertainty created by changes in oil prices; moreover, in the process, these energy sources make the economy more stable.
Conclusion
In conclusion, there is a number of challenges that have affected the economy of the US and which have resulted into the negative impact on the way people live as well as on the progress of the national economy . The major challenges that have been experienced by the US economy include cyber-attacks, slow economic growth, stiff competition from other global economies and financial stress. Moreover, these issues have led to various problems that have influenced the lives of citizens also in addition to the performance of the national economy. However, it is important to note that there are several ways that can be used to address these challenges in order to ensure sustained economic growth and find an effective solution for each challenge so that the economic situation in the country improves. Hence, these efforts include collaboration with national, local and international agencies to enhance the state economic prospects.
