PLEASE READ AND MAKE A BRIEF COMMENT REGARDING THE STATEMENT BELOW. Thee fact th

Question

PLEASE READ AND MAKE A BRIEF COMMENT REGARDING THE STATEMENT BELOW.

Thee fact that both Germany and Finland are able to sustain high rates of growth in GDP with the presence of high tax rates over the United States who ranks low amongst other countries with tax burden simply shows how gross national product can help the economy and its citzens. With different viewpoints of high tax rates and how it affects GDP, its important to look at how each country is operated. With Germany and Finland, both having abundance of natural resources and equiped labor with the added demand from other countries, besides the U.S. it is understandable how the economy is still able to flourish. Although all three countries are considered a developed country, the U.S. is the not the best in all factors that affect economy. These factors are as listed: Human Resources, Natural Resources, Capital Formation, Technological Development, and the social and political factors. Both of these countries have a high percentage of their GDP from exports of goods and products and the tariffs of these products. Whereas, the U.S. is not a country that is big on exports but more relying on imports to help a nation considered a melting pot of ethnicities.The heavy tax burden in Germany and Finland, helps these countries to be able to continue to thrive off their goods and resources not only with cultivating products but the livliness through trade.

Explanation / Answer

US Human resources: United states lacks suitable human resources for information age, This is one reason for issuing large number of high skilled work permits to people with higher skills. Also it is one of the key reasons for outsourcing boom that is happening.

Natural resources: US lacks natural resources like oil, Further huge consumption has resulted in excess import of every goods and service. Lower tax also contributed to problem. Us only charge 15% on imported cars while China charges nearly 300% tax on imported cars, US is just encouraging other countries to export to US than setting up manufacturing there. This is super flawed policy

Capital Formation : If you are importing most of the requirements or large portion of your market requirements then certainly there would be no need for capital. This is one reason for US not recovering from recession even after decreasing interest rates to near zero. Fed can give money but cannot help you to invest and make profits.

Technological development: The amount of innovation that is happening in next generation automobiles for example is very high in japan and germany. The US will likely remain as customer for a long time. This was because of lower investment in education by US.

Social and political factors: Socially US is multi-ethnic so their tastes are global, So most of the global stuff gets imported anyway. Politically US was open economy from beginning, WTO was founded by its ideas of free market, now US is the country that sacrificed most for WTO. We infact were victims of our own creation.

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