Economic growth and success of America

However, these aspects are seen the reasons for the instability in American capitalist system. The optimists assert that the instability that is being experienced is temporary. To them the ending of stock market bubble will result in strengthening practical attitudes among the economic players. And supposing the economic policies taken in the past are corrected and new suitable measures taken, the optimists argue that the market will be able to restore the economic growth and success of America.

The lack of the pessimists in providing sustainable arguments about the outcome of the future capitalist American economy and the causes of present crises gives the optimists’ viewpoint more weight. To explain the actual basis of America’s economic problems and the present recession, and give a future prediction, a totally varied approach is required. This could be a Marxist approach. A Marxist approach would begin by analyzing the failure of international capitalism that has happen over the last twenty years or so.

According to Marxist viewpoint, there capitalist have failed to generate enough revenues to act as a foundation of sustained capital accumulation and spur economic growth. To them this did not accidental happen, but it comes from the style of the system: the persistent replacement of human manpower that provides value and revenue by machines and equipments. As revenue or profits have continued to fall in all sectors, there as been a higher and higher inclination for investors to focus on particular sectors in the economy, where revenue seems to be higher than the normal.

This has resulted to an increase in the amount of speculative booms as well as crushes in America. The capitalist American system has been able to solve these crises temporarily, although, merely at the expense of putting up patterns of economic growth that in turn lay the foundation for future economic crises. Thus, the 1997, avian financial crisis was able to be “resolved” by American boom, however, this boom in turn laid down the foundation of economic crisis that is presently being witnessed in America.

Hiatt (2007) explains that, this economic crisis has not just resulted from the stock market slump and government debt, it has also occurred due to the conduct of investment that raised the boom. Whereas IT investment might have raised productivity, these increases are not resulting in increase in profits. This is due to displacement of human labor force and because of increased competition from the emerging markets. The build-up of credit that occurred in US in 1990s did not correspond to changes in the fundamental rate of revenue and this, Marxists argue is the main cause of the current melt down.

In these situations, economic slowdown doe not merely result from inappropriate monetary policies. Daianu (2008) Supposing Greenspan had increased the interest rates in 1997; the economic growth in America would not have reduced the situation Asian financial crisis it was suffering in 1997. However, Borsodi (2007) states that, the present policy of maintains rate at low levels to cope with recession posses the danger of encouraging the wave of debt in America.

These difficulties result from the central instability of the capitalist system. This implies that the double-dip depression that America is experiencing right now was inevitable, and that it is probably going to be prolonged, with a slowdown in economic growth being observed from some years to come. This also means that the measures that are being taken right now to correct the depression would be capable of creating problem- free capitalism in future (Borsodi, 2007).

But, on contra these measures are most likely to create a foundation foe greater economic instability in future. And coupled by the fact that established economists have sharply disagreed on how best to manage the present recession, there are many reasons for socialists to assert that the economic structures need to be replaced since they are the ones that cause this problem at the very first place. However as Daianu (2008) argue, the future of America’s capitalist economy has a bleak future.