Analysis of United States Economy 2010-2020 (Free Essay Sample)

For eighteen years I have listened to adults argue over whether America needs to be great again or if it was ever truly great at all. Most of these conversations were “economy this…” and “inflation and unemployment rate that…” While a decade-long snapshot doesn’t determine America’s supposed greatness, it gives way to why people believe as they do. Regardless of any personal bias, I never deeply understood why people would care about any of those things. After growing up and taking economics courses, I began to learn how significant economics remains. The purpose behind my choice of the United States from 2010 to 2020 was to gain knowledge of the most recent economic changes in a country that directly impacts me. 

To further explain, I chose the United States from 2010 to 2020 for four main reasons. First, I always hear how the economy is getting worse.  Within the past two years, we have lived through multiple “once in a lifetime” events; these events have changed our way of life and shown how little it takes to throw our economy into a frenzy. Along with this, we will begin to explore the initial effects of the Covid-19 pandemic. While the pandemic and its upheaval continue today, I was hard-pressed to find the amount of information I desired about 2021. Next, I have come to realize how much economics impacts my life. I just turned eighteen a few months ago; until this milestone, I was naïve to how much of life depended on economics. I am at the age where I begin applying for credit cards, finding shelter, and paying for personal necessities. Being in the know will do nothing but benefit me. Finally, with the slow of the pandemic, people have pushed for us to “get back to normal.” However, I don’t believe going back to normal was or will ever be the answer; I fear our country will settle on the topics we’ve grown passionate about, simply for ease. This project is a way for me to evaluate the direction our nation was headed before the pandemic, so I know what to monitor and the possible repercussions. 

In the year 2008, the United States suffered a catastrophic recession; due to how the business cycle functions, the United States began an expansionary period around June 2009. From June 2009 to February 2020 the United States economy was expanding (National, 2021). In February 2020, the peak expansion date was reached; the following trough occurred in April of 2020 (National, 2021).  Since April of 2020, the US has been considered to be in an expansionary period. Overall, I would sum up 2010 to 2020 as years of economic growth while being a perfect example of the business cycle. 

Gross domestic product can be defined as “the market value of all final goods and services produced in a year within a country” (Boyes). In other words, it is the total amount produced within a year-long span. In the years 2010 to 2019 the United States’ GDP was on a continuous upward slope; the growth rates from one year to another during this period span from 1.55% to 3.08%. For the year 2010, GDP was almost fifteen billion dollars; the peak in 2019 occurred at around twenty-one-and-a-half billion dollars (). This upward trend ended in the year 2020; GDP dropped almost 3.5% to just under twenty-one billion dollars (). The GDP cycle during these years closely follows the business cycle. Since 1960, there have only been two instances where the GDP graph takes a substantial hit to its upward curve. The first occurred in 2009, right before the start of my selected time. This trough is what set the foundation for the expansion that occurred in the following nine years. Since the GDP drops from 2019 to 2020, it can easily be assumed that the peak expansion date occurred during that span. Although 2020 can be considered an uncontrollable change to GDP, it nonetheless represents the contraction and trough following expansion and peak. After the trough was reached in 2020, a new expansionary period began, therefore restarting the business cycle.

Unemployment is another factor we use to determine the state of our economy. Keeping the unemployment rate low means that people are working and contributing to society, however, it isn’t an easy number to determine. The unemployment rate doesn’t consider those outside the labor force or those in special categories such as discouraged, underemployed, and underground. This contributes to the underestimation and overestimation of actual unemployment (Boyes). In January 2010 the unemployment rate was at 9.8% and in December of 2020 it was at 6.7% (). Throughout these years it is fair to say the unemployment rate declined. From a more thorough view, the unemployment rate during this time closely follows the previously established trends of the business cycle. Although the charts are similar in meaning, when viewing them they appear as opposite extremes. In the first nine years, the height of unemployment occurred in March 2010 at 9.9%. While the unemployment rate had slight up and down fluctuations month-to-month, overall, from 2010 to 2019 the unemployment rate steadily declined to 3.6% (). This declining narrative continues to March of 2020 when the unemployment rate suffers its first substantial spike. The height of unemployment during these ten years occurred in April 2020 at 14.7%. () The height of unemployment occurred around the same time as the economic trough. Once again lowering as the economy settles back into the expansion phase. 

Inflation is a sustained change in absolute price; in other words, as prices increase the purchasing power of a singular dollar decreases. Inflation is one way to measure how much it costs to live. An example of this is let’s say a gallon of milk cost $1 in 1970; in the year 2000 that same gallon of milk is $2 and in 2010 the cost is $3. The price you pay is higher, therefore lowering the amount you can spend elsewhere; your cost of living in this scenario has been raised since the base year of 1970. In 2010 the inflation rate was 1.64% and in 2020 it was 1.23%, therefore showing a decreasing inflation rate. Peak inflation occurred in 2011 at 3.16% and the inflation minimum occurred in 2015 at .12% (). The inflation rate seems to have gone through two business cycles in the time everything else completed one. In 2010 inflation itself was in its expansionary period (inflation rate is rising) until it capped out in 2011. At which time inflation began to decrease till 2015 when it hit a trough; this began a new expansionary period that lasted till 2018. From 2018 to 2020 inflation was once again decreasing. 

Throughout this discussion it is prevalent that the United States hit a peak in February 2020 with a trough in 2021; expansionary periods followed both before and after. However, it become a topic of interest to explore whether this happened purely concerning the business cycle or due to the beginning of the Covid-19 pandemic. Surely, the pandemic itself affected the economy but I want to focus on how we could have been better prepared in relation to the passing of the Affordable Care Act. 

The Affordable Care Act (ACA) was passed in 2010 by former President Barack Obama. “The uninsured rate has fallen by more than 40 percent” (). Although the ACA was far from perfect, it brought the possibility of universal healthcare to the table. It opened conversations and essentially put a foot in the door for bipartisan legislation. Had any successful legislation been passed it would have created a healthier America. People would receive more affordable coverage and would be able to get health issues resolved, significantly improving health. On the other hand, the ACA did in-theory accomplish a few large feats. The ACA lowered the uninsured numbers providing more people healthcare access. It could be named a contributor to the prosperity that lasted till 2020. Without the passing of the ACA, the workforce would have been reduced, increasing the destruction that arose from Covid-19. The healthier people we have the more productive of a society we will be. In addition, unemployment rates will fall closer to the natural level, GDP will rise, and people will be less prone to illness. Assuming we created a foundation and began to create a healthier America, as a nation we could have been more prepared for the Covid-19 pandemic. 

The United States has witnessed almost one million deaths due to Covid-19 (). This large number of sudden deaths in a small time period left many available jobs and not as many people to fill them. In the event we didn’t idolize the western culture maybe fewer people would have been considered prone or at-risk for severe Coronavirus infection. With fewer at-risk patients, more could have survived and maintained productivity. Due to an accumulation of pandemic-related issues, the economy began a quick decline. We suffered and continue to suffer from worker shortages, supply shortages, shipping issues, industry-specific issues, high inflation, and much more. With more healthful workers, more people could have survived and continued to fill their roles in society. While the economy would have eventually suffered from a recession, the pandemic quickened the process and lengthened the uncertainty for better days. Without the pandemic, we may have had a higher GDP, less unemployment, lower inflation, and a more stable economic view.

In conclusion, 2010-2020 in the United States was a prime example of the business cycle. There was a great expansion that allowed us to reap many rewards till it led to the eventual recession. The ACA could have been used to create a healthier America, therein, leading to fewer pandemic deaths and a smoother recession, it nonetheless assisted in the prosperity experienced in 2010-2019. Do you believe the United States will use the failures of the ACA and the consequences of the pandemic to improve healthcare for the sake of productivity and economic stability?