Political System and Leadership Behind US Economic Growth

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Political System and Leadership Behind US Economic Growth

Even now, the top priorities of the US are to invest in transportation infrastructure, research-based education, medical sciences, and goods and services that ensure job possibilities and system improvement. As a result, the US has become a dreamland for everyone on the planet. It is also a nation based on the rule of law, documentation, and immigration.


The GDP of the United States is estimated to be around USD 25 trillion. It is seven times the size of India and Russia, and five times higher than that of China. The US economy is built on the foundations of the free market, capitalism, innovation, and technological development. The United States has a greater grip over natural resources and land than any other countries.

How did the United States become a global economic powerhouse?

The Resilient Political System
The RPS began on July 4, 1776, when the country gained freedom from British colonialism and became an independent and sovereign nation. A nation's strong economy is dependent on its strong political structure. The founding fathers of the United States, George Washington, Alexander Hamilton, Benjamin Franklin, John Adams, Samuel Adams, Thomas Jefferson, James Madison, and John Jay, constructed robust political structures that were instrumental to the country's economic success. To ensure political stability in the country, the US created a robust, resilient, and strong democratic state under the presidential system of government. This system’s main goal was to eliminate civil wars, military coups, and dictatorships that they saw in Europe.

The system adopted by the US helped in faster decision-making as compared to the parliamentary system of government. For example, eight presidents of the US died while being in office but there was no political vacuum. The vice-president took over the office and averted political turmoil. Had there been a parliamentary system as in the UK, the plight would have been completely chaotic and anarchic.

Europe gave birth to liberty, equality, and fraternity, but putting these into practice required many years due to the parliamentary system. The fruits of the industrial revolution could not reach the poor due to the existence of rigid hierarchical feudatories which hampered social mobility. Unlike hierarchical societies in Europe, the US society was made up of an educated middle class, largely traders and settlers from various backgrounds. Every citizen of the United States now has new opportunities.

The First Amendment gave Congress the ability to adopt patent laws in 1971. The country's inventiveness was aided by these patent laws.

Expansion to the West
The United States' geographical expansion aided access to valuable minerals and provided strategic advantages. During the American Revolution, there were only 13 colonies in the US all of which were located on the eastern coast of North America.

Following Thomas Jefferson's purchase of 'Louisiana' from France in a 15-million-dollar bargain in 1803, the US territory extended westwards. The United States' territory was doubled as a result of this purchase. It extended all the way to the Gulf of Mexico and the Canadian border. The concept of 'Manifest Destiny' cleared the path for the United States to increase its worldwide influence as its territory moved westward. The United States' annexation of Texas in 1845 sparked the Mexican-American War (1846), which the United States won in 1848. Mexico relinquished nearly half of its land to the United States under the 'Treaty of Guadalupe Hidalgo,' which included Texas, California, New Mexico, Arizona, Nevada, Utah, Colorado, and Wyoming. In 1846, the United States wrested possession of Oregon from the British Empire.

In 1867, the United States purchased Alaska from the Russian empire. Following the victory in the Spanish–American War (1898), the United States expanded its power in the Pacific and Central America, gaining control of Guam, Puerto Rico, and the Philippines, as well as Hawaii later on. The United States bought the construction rights to the Panama Canal from the French Company in 1902. Panama was ruled by Colombia at the time. Theodore Roosevelt, the President of the United States, interfered in Panama - a geostrategic location - in 1903 and declared it an independent republic. As a result, the Panama Canal was totally under American authority.

The Gold Rush in California
James Marshall discovered substantial gold mines in California on January 24, 1848, propelling the United States to the forefront of economic activity. People from Peru, Chile, and even China began traveling to California in search of work and survival during the California Gold Rush of 1849. It gave the United States a significant economic advantage. According to the World Gold Council, the Carlin Unconformity or Carlin Trend in Nevada is one of the world's largest gold mines, and vast gold mines have also been identified in Alaska. In terms of gold production, the United States ranks fourth in the world after China, Australia, and Russia. It possesses the world's largest foreign exchange reserve with 8,500 tons of gold.

The Find of Black Gold
Massive industrialisation began in the United States in the 19th century which skyrocketed the demand for fuel. Edwin Drake discovered an oil extraction wheel, a new technology to extract oils from oil wells, in Pennsylvania in 1859. It helped the United States to become one of the world's main oil producers. With the annexation of Texas, the United States gained more oil and gas reserves. Large oil reservoirs existed in Texas, California, New Mexico, and Alaska. Alaska was the fifth largest oil producer in the US from 2015 to 2019. The developments in transportation and technology in the 20th century benefitted the United States as well.

In 1908, a British company discovered oil wells in Iran which shifted the world's political economy and paved the way for the discovery of other oil mines in the Middle East. A British corporation used to reap more oil benefits from Iran. Saudi Arabia later discovered large oil resources in the country. During the Second World War, the US and Saudi Arabia reached an arrangement under which Saudi Arabia granted the US access to oil supplies in exchange for the US guaranteeing the Saudi regime's security. In the geopolitics of the Middle East, the oil issue has emerged as the "largest element."

Oil politics were also a factor in the 2003 Iraq conflict. Another turning event in the US booming economy was the US encroachment on Iraq which resulted in the demise of Saddam Hussein. The military industry of the United States was massively boosted as a result of this economic boost. The discovery of oil resources in the United States increased the potential for trade, technology, manufacturing, and modern industry.

Second World War and Arm Sales
The United States stayed out of world wars, sparing valuable resources from being wasted. The First World War began in 1914, although the United States did not enter the conflict until 1917. The Second World War began in 1939, and the United States did not become involved until December of 1941. Until then, the United States had already established itself as a strong economic powerhouse. Its defence industry experienced massive expansion.  

Both world wars necessitated massive amounts of weaponry and ammunition, and the United States, as the largest military business, began selling them. During the Second World War, the United States was a significant weaponry supplier to the Allied Powers (Britain, France, Russia) which boosted the economy and military industry. During the First World War, the United States lent the Allies USD 7 billion.  During World War II, the United States was neutral under the Provisions of Neutrality Act of 1939. But President Franklin D. Roosevelt persuaded the Congress to provide military supplies to the Allies. Roosevelt formed a "War Production Board" and rose defence spending from 1% to 40% of GDP.

In contrast to Europe, which was decimated by the Second World War, the US economy benefitted from the war in a variety of ways. It demolished the British Empire's global domination. After the Second World War, the United States gained nuclear weapons and became the world's superpower. The sole purpose of the US entry into the World War later than the rest of Europe was to sell its armaments. Roosevelt's foresight helped the US to solidify its economy and become a superpower. Roosevelt is a great example of how a visionary, creative, and innovative leader can lead a country to rapid economic progress.

Even now, the top priorities of the US are to invest in transportation infrastructure, research-based education, medical sciences, and goods and services that ensure job possibilities and system improvement. As a result, the US has become a dreamland for everyone on the planet. It is also a nation based on the rule of law, documentation, and immigration.

Now, let’s talk about how the United States prioritised its infrastructure. The University of Maryland discovered in 2014 that every dollar spent on infrastructure results in a USD 3 increase in GDP. This explains the United States' huge investments in infrastructure and scientific advancement. Since 1990, the United States has been fostering scientific discoveries and encouraging scientific studies. The United States accounts for over one-third of Nobel Laureates, the majority of them in the sciences.

In their article published in 2021, Alison L Deutsch, Michael J Boyle and Michael Logan, write: “During the decade following the Great Recession, the United States' economic recovery was in full stride. Prior to the current COVID-19 outbreak, millions of jobs were being generated, and pay growth was on the rise. What industries were responsible for America's self-sufficient economy?”

The five sectors listed below have aided in the recovery of the economy following the recent economic downturn. Data from the Bureau of Labor Statistics (BLS) and industry perspectives were used to make the decision. Prior to the COVID-19 pandemic, expansion in healthcare, particularly in healthcare-related jobs, was a major driver of economic growth. Artificial intelligence and machine learning, for example, have aided in the expansion of various industries. Construction, retail, and non-durable manufacturing are some of the other industries that have made significant contributions to the economy over the last decade.

IBIS World has compiled a list of the US's Biggest Industries by Revenue in 2022. They are:
1.    Retirement and Pension Plans in the United States (USD 1.257.9 billion)
2.    Health and Medical Insurance in the United States (USD 1.145 billion)
3.    Drug, Cosmetic, and Toiletry Wholesaling in the United States (USD 1.049.9 billion)
4.    New Car Dealerships in the United States (USD 978.7 billion)
5.    Hospitals in the United States (USD 968.5 billion)
6.    Life Insurance and Annuities in the United States (USD 886.7 billion)
7.    Pharmaceuticals wholesaling (USD 868.8 billion)
8.    USD 791.0 billion spent on public schools in the United States
9.    Supermarkets and Grocery Stores in the United States (USD 758.4 billion)
10. Commercial banking in the United States (USD 703.4 billion)

Political stability, oil resources, gold reserves, strategic benefits of strategic location, large weapons sales, neo-colonialism, and other elements, in addition to historical considerations, helped the United States become a world superpower. However, political stability, leaders' passion, dedication, and tenacity, and, above all, human resource management have all made this possible.

Mr. Koirala can be reached at [email protected], 9851136302 for comments

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