United States
The United States became the world's first modern democracy after its break with Great Britain (1776) and the adoption of a constitution (1789). During the 19th century, many new states were added to the original 13 as the nation expanded across the North American continent and acquired a number of overseas possessions. The two major traumatic experiences in the nation's history were the Civil War (1861-65) and the Great Depression of the 1930s. Buoyed by victories in World Wars I and II and the end of the Cold War in 1991, the US remains the world's most powerful nation-state. The economy is marked by steady growth, low unemployment and inflation, and rapid advances in technology.
The Republican and Democratic parties have dominated US politics this century. The Republicans are viewed as the more conservative, market-driven party whereas the Democrats are seen as relatively interventionist. However, there is a broad consensus in American politics, which militates against radical programs. There is some anti-government militancy in America and some ethnic tensions, but the underlying depth and breadth of political consensus is marked, particularly with respect to economic development.
Nevertheless, the United States' vulnerability to external terrorist attacks was highlighted in September 2001 when hijackers simultaneously commandeered 4 commercial jetliners, crashing two into the World Trade Center and one into the Pentagon. The fourth plane crashed into the ground in a rural area of Pennsylvania. Nearly 5,000 people on the ground were reported killed in the attacks and at least 266 aircraft passengers and crew perished. Initial reports indicate the attacks were very likely masterminded by Saudi-born terrorist Osama bin Laden. US President George W. Bush subsequently vowed to launch a global assault against terrorism and states that harbor terrorists.
The US Government remains concerned about continued threats. The US Government has issued a number of warnings of potential further terrorist attacks in the US. In August 2004, the Department of Homeland Security raised the threat level to "high" (orange) for the financial services sectors in New York City, northern New Jersey and Washington, DC. This was in response to “unusually specific information. In May 2004, the US Government said that there was "credible intelligence from multiple sources" that al-Qaida planned to attempt an attack on the US in the next few months
As of mid-April 2004, the U.S. economy appeared to be recovering somewhat, with first quarter 2004 real growth in gross domestic product (GDP) of 5.0% (year-over-year). The U.S. Federal Reserve has maintained its interest rate target at an extremely low level (1.00%) in an effort to stimulate an economic recovery. At the same time, fiscal policy remains stimulatory, with the U.S. budget running large deficits (see below). The U.S. unemployment rate was estimated at 5.7% in March, up 0.1 percentage points from February, with the economy adding 308,000 jobs during the month but even more people entering the job market. Real (inflation adjusted) U.S. gross domestic product (GDP) growth for 2003 is estimated at 3.1%, up from 2.4% real growth in 2002. For 2004, real growth is expected at 4.7%.
The U.S. merchandise trade deficit is estimated at $550 billion for 2003. The current account deficit now is running at about 5% of GDP, compared to 1.5% in 1997. During the past two years, the dollar has depreciated significantly against several major currencies, including the Euro and the Japanese Yen.
The American Constitution specifies a formal separation of powers and a system of "checks and balances" between the executive, the legislature and the judiciary. This makes the process of government relatively slow, but consistent. Comparatively low government interference in the wealth-creation process supports a free enterprise culture that, this century, has built US economic and political world leadership.
On January 20, 2001, George W. Bush was inaugurated as President of the United States, succeeding Bill Clinton. Currently, the Bush administration is examining U.S. national energy policy, with a task force led by Vice President Dick Cheney, and including the secretaries of energy, interior, transportation, agriculture, commerce, and treasury, the heads of EPA and the Federal Emergency Management Agency, plus several others. The legislature consists of a Congress with two houses.
The judiciary is the Supreme Court. The executive, subject to the approval of the legislature appoints its members, until retirement. Its prime role is to interpret laws and judgments according to the guiding principles of the constitution.
The Federal Reserve, which controls monetary policy and, with other institutions, banking regulation and supervision, is led by a Board of Governors which are similarly executive-chosen and legislature-approved. There is a regular, if infrequent, need for re-appointment.
Internationally, American politicians are equivocal about what role their country should play in the process of world development. For example, the US is broadly in favor of "free trade" but domestic business lobbies often have a strong influence on how America bargains with its trading partners.
