 The
US has the largest and most technologically powerful
economy in the world, with a per capita GDP of
$37,800. In this market-oriented
economy, private individuals and business firms
make most of the decisions, and the federal and
state governments buy needed goods and services
predominantly in the private marketplace. US business
firms enjoy considerably greater flexibility than
their counterparts in Western Europe and Japan
in decisions to expand capital plant, to lay off
surplus workers, and to develop new products.
At the same time, they face higher barriers to
entry in their rivals' home markets than the barriers
to entry of foreign firms in US markets.
US firms are at or near the forefront in technological
advances, especially in computers and in medical,
aerospace, and military equipment; their advantage
has narrowed since the end of World War II. The
onrush of technology largely explains the gradual
development of a "two-tier labor market"
in which those at the bottom lack the education
and the professional/technical skills of those
at the top and, more and more, fail to get comparable
pay raises, health insurance coverage, and other
benefits. Since 1975, practically all the gains
in household income have gone to the top 20% of
households. The years 1994-2000 witnessed solid
increases in real output, low inflation rates,
and a drop in unemployment to below 5%. The year
2001 saw the end of boom psychology and performance,
with output increasing only 0.3% and unemployment
and business failures rising substantially.
The response to the terrorist attacks of 11 September
2001 showed the remarkable resilience of the economy.
Moderate recovery took place in 2002 with the
GDP growth rate rising to 2.4%. A major short-term
problem in first half 2002 was a sharp decline
in the stock market, fueled in part by the exposure
of dubious accounting practices in some major
corporations. The war in March/April 2003 between
a US-led coalition and Iraq shifted resources
to the military. In 2003, growth in output and
productivity and the recovery of the stock market
to above 10,000 for the Dow Jones Industrial Average
were promising signs. Unemployment stayed at the
6% level, however, and began to decline only at
the end of the year. Long-term problems include
inadequate investment in economic infrastructure,
rapidly rising medical and pension costs of an
aging population, sizable trade and budget deficits,
and stagnation of family income in the lower economic
groups.
Capital : Washington, DC
Administrative
divisions:
50 states and 1 district*; Alabama, Alaska, Arizona,
Arkansas, California, Colorado, Connecticut, Delaware,
District of Columbia*, Florida, Georgia, Hawaii,
Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky,
Louisiana, Maine, Maryland, Massachusetts, Michigan,
Minnesota, Mississippi, Missouri, Montana, Nebraska,
Nevada, New Hampshire, New Jersey, New Mexico,
New York, North Carolina, North Dakota, Ohio,
Oklahoma, Oregon, Pennsylvania, Rhode Island,
South Carolina, South Dakota, Tennessee, Texas,
Utah, Vermont, Virginia, Washington, West Virginia,
Wisconsin, Wyoming
Dependent areas:
American Samoa, Baker Island, Guam, Howland Island,
Jarvis Island, Johnston Atoll, Kingman Reef, Midway
Islands, Navassa Island, Northern Mariana Islands,
Palmyra Atoll, Puerto Rico, Virgin Islands, Wake
Island
note: from 18 July 1947 until 1 October 1994,
the US administered the Trust Territory of the
Pacific Islands. It entered into a political relationship
with all four political units: the Northern Mariana
Islands is a commonwealth in political union with
the US (effective 3 November 1986); Palau concluded
a Compact of Free Association with the US (effective
1 October 1994); the Federated States of Micronesia
signed a Compact of Free Association with the
US (effective 3 November 1986); the Republic of
the Marshall Islands signed a Compact of Free
Association with the US (effective 21 October
1986)
Independence:
4 July 1776 (from Great Britain)
National holiday:
Independence Day, 4 July (1776)
Constitution:
17 September 1787, effective 4 March 1789
Legal system:
federal court system based on English common law;
each state has its own unique legal system, of
which all but one (Louisiana's) is based on English
common law; judicial review of legislative acts;
accepts compulsory ICJ jurisdiction with reservations
Chief of state:
President George W. BUSH (since 20 January 2001);
note - the president is both the chief of state
and head of government
Head of government:
President George W. BUSH (since 20 January 2001)
; note - the president is both the chief of state
and
head of government
Cabinet:
Cabinet appointed by the president with
Senate approval
Elections:
President and vice president elected on the same
ticket by a college of representatives who are
elected directly from each state; president and
vice president serve four-year terms; election
last held 2 November 2004 (next to be held November
2008)
Election results:
George W. BUSH reelected president; percent of
popular vote - George W. BUSH (Republican Party)
50.9%, John KERRY (Democratic Party) 48.1%, other
1.0%
Judicial branch:
Supreme Court (its nine justices are appointed
for life on condition of good behavior by the
president with confirmation by the Senate); United
States Courts of Appeal; United States District
Courts; State and County Courts
Political parties and leaders:
Democratic Party [Howard Dean]; Green Party [leader
NA]; Libertarian Party [Steve DAMERELL]; Republican
Party [Ken MEHLMAN]
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