What is the economic system of the US?

Answer 1

Capitalist Economy. ? Not at all.

The "pat" answer to the question of the US economic system of the term capitalist is far from being accurate. Most economists will use the term of "free market economy" or a "mixed economy" and there are valid reasons for this.

The US Government and the organizations it has created have moved the US economy into one of the two just mentioned systems. Here are some examples:

A. The Federal Reserve System, led by the Federal Reserve Bank of New York plays a large role in interest rates, bank supervision, merger approvals, regulating the cost of the "dollar" and being a lender of last resort to financial & other types of industries in the US. A capitalist economy would not have such a powerful, government sponsored organization;

B. The Federal and State governments in the US set the "minimum wage" levels. Once again, this could not exist in a capitalist economy;

C. Various high level departments within the Federal & State governments can control industries that are deemed harmful to the environment. The large project of the Canadian -US energy pipeline has been stopped on several occasions by the Federal Government;

D. The Federal Government regulates anti -trust laws. It can change an industries structure to avoid any hints of monopolies or other acts regarding trade unions as an example; and

E. The Federal & State governments in the US regulate to one degree or another, health care in the USA. This of course is a multibillion dollar industry; and

F. A large part of the US population is elderly and receives monthly social security checks. The increase in the amounts these checks or the "no change" policies are governed by the Federal government.

The list on these economic factors that the government has a hand in makes the term capitalist an outdated word. A

far back as any researcher wants to go, they will find the US Government a large economic factor.

Note: all of the above is new material. By an error I forgot to mark this as a major edit.