Economy: the complex of human activities concerned with the production, distribution, and consumption of goods and services the management of the resources of a community, country, etc., especially with a view to its productivity

The U.S. 21st-Century The Economy

The 20th century unfolded in a whirl of new technology. Perhaps no innovation was as significant as the computer. The first modern computer was invented in 1946. The development of the silicon microchip made personal computers possible.

By the 1980s, computers were transforming American business and everyday life. Apple Computers and Microsoft made computers and software affordable for millions of Americans. Technological advances made other electronics, such as video games and cell phones, possible.

The 1990’s Economy Consumer confidence and spending Driven by the rise of technology and the Internet The “dot.com” industries Low unemployment and low inflation (progressive increase in the general level of prices brought about by an expansion in demand or the money supply) 1990 5.6% 1995 5.6 6.8 1996 5.4 7.5 1997 4.9 1993 6.9 1998 4.5 1994 6.1 1999 4.2

1990’s Economy (cont) Billions in bonds sold to Chinese, who gradually assumed the role of banker to U.S. Dependence on Chinese cheaply manufactured goods to sustain American consumer-driven economy Kept inflation, interest rates and wage costs low Dow Jones Industrial Average stood at 1000 in late 1980s and soared to 11,000 by 1999.

Biotechnology led to revolutionary advances in health care. New agricultural technologies led to larger and more productive farms. American society changed profoundly. People began to live longer, healthier lives, and the labor force dramatically shifted away from agriculture. 7

The late 20th century became known as the “information age.” Computers, cell phones, and satellites made communication and information access fast and easy. The Internet, a worldwide network of computers, transformed business, education, and entertainment. 8

New communications technologies enabled companies to do business around the world. Multinational corporations began doing business in many different countries at one time. Globalization has made products cheaper and available to more people, but this comes at a price: economic woes that affect one region are now often felt in other regions.

Computers changed the way business operates. Many people in locations around the world might be involved in one purchase. 10

Government & Economy Each year the government collects taxes and uses that money to provide services across the nation and globe If the government spends more than it takes in, it is called deficit spending GDP-gross domestic product-the total value of all goods and services produced domestically by a nation during a year. GNP-gross national product- the total value of all final goods and services produced annually by a nation

The U.S. GDP is estimated to be around $1,577 billion. U.S gross federal debt $16.7 trillion projected 2012 $3.8 trillion federal spending 2012

21st-Century Economy “dot.com” sector collapsed in April 2001 Stock Market began a substantial decline, lasting over a year Housing “bubble” begins collapsing finally creating chaos in late 2007, early 2008. Thousands of homes go into foreclosure after a decade of “shady, risky” lending with no one questioning. Annual income rose 20% for wealthiest 20% of population, rose 8% for next 20%, remained flat for remaining 60% with actual drops in bottom 20%, creating a two-tiered economy.

21st-Century Economy (cont) By 2008, top 1% of population averaged over $1.1 million annually, while bottom 90% only averaged $31 thousand. Outsourcing US jobs becomes prevalent among top US corporations starting in the early 2000s, even as tax dollars bailed them out. The 2000s also saw the coming of the “digital divide” in that low and poor income homes have no computers or digital access skills now almost mandatory for employment

U.S. Unemployment Rates Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2002 5.7 5.9 5.8 6.0 2003 6.1 6.3 6.2 2004 5.6 5.5 5.4 2005 5.3 5.2 5.1 5.0 4.9 2006 4.7 4.8 4.6 4.5 4.4 2007 2008 6.5 6.8 7.3 2009 7.8 8.3 8.7 8.9 9.4 9.5 9.6 9.8 10.0 9.9 2010 9.7 2011 9.1 9.0 8.5 2012 8.2 8.1 7.9 2013 7.7 7.6 7.5 7.4

Mandatory spending: social security, transportation, medicare & health, veteran’s benefits, agriculture; Mandatory spending makes up about two-thirds of the total federal budget. By far the largest mandatory program is Social Security, which comprises around one-third of mandatory spending and around 20 percent of the total federal budget; The discretionary budget is usually around one-third of total federal spending.

Activity: “poor America” “paying the bills” “Uncle Sam—CEO”