Comparison of actual deficit to trade from 2012-2014

The US market and the economy of the United states is more open than any other economy in the
world and due to this open economy the import and export is more easy and flexible for the
companies doing business all around the world. In nineteenth century US was ranked among
lowest countries in the world doing trades within the country and outside the country and in 1960
the exports and imports of US were 5% of the total GDP. With the passage of time as the world is
become globalization in which each and every company is participating is economic
competition, there comes a dramatic increase in the imports and exports of US which increases
from 5% to 14.55 of the total GDP.
With all these facts that the US market is an open and emerging market in the world there
comes a decline in the imports and exports of the country in consecutive four years starting from
2000. The overall ratio of the trade deficit to GDP of US exceeds to 5% of the total GDP which
showed a decline in the performance level of the country. There were several reasons behind this
decline, the first reason was the terrorist activities around the world and due to these terrorist
practices the government of US applied some restrictions and barriers on the trade which
discourages the companies. The second reason was the emerging and developing economy of
China whos performing extra ordinary from last 20 years.
From 1960, total exports of US products were more than total imports of the country and
has a positive impact on the GDP of the country and with the passage of time the trade graph
showed a positive swing which was helpful for US economy. The trade volume start increasing
from 1960 to 1999 and the percentage of imports and exports in GDP were increased from 5% to
14.5%. The current account of GDP showed a deficit in the trade of US market in which imports

and exports are discouraged and as a result the trade has a negative impact on the current GDP of
US. The current US trade deficit to GDP was -2.7 in 2012 and showed a positive move in the
very next year as the deficit to GDP declined from -2.7 to -2,4 but it still showed a negative
impact on the economy and GDP of the country. In 2013 the tendency of the deficit to GDP was
less than the tendency of 2012. The advancement in the technology and new emerging business
allowed them to improve their import and exports level. The policies made by the government
also make a positive impact to the economy.
In 2014 the current account balance of GDP showed more progress and the trade deficit
to GDP fallen down from -2.4 to -2.2 percent and which showed a positive attitude towards the
investors and to the new businesses. The policies made by the government of Obama were really
helpful for the country and it allowed them to move towards stabilization. After the incident of
9/11 the US economy was crashed and investors were discouraged to invest their income in
different companies and from that time the economic fluctuation starts. From 2001 to 2008 US
market continuously faced a greater negative GDP in the country and the trade deficit to GDP
was reached at the lowest level in the history of United States at -6% in 2008. The US economy
was abolished and most of the biggest companies faced a lot of recession in the country. Because
of recession the unemployment rate increased due to which imports and exports of the country
fallen down. The current account balance in terms of GPD indicates the competitiveness of the
countries in which how companies perform well and generate profitability from various
corporate sectors.

The people working within US are applicable to pay social security and Medicare taxes to
the government and those taxes are used to provide social security to the citizens of United States
and also providing free medical facilities to each citizen. These taxes are deducted from the
salaries of each national working with a company at a specific rate. In 2012 the effective tax rate
deducted from the salary of each citizen was 4.2% and for those who were running their own
businesses a tax rate of 10.4% applied and in 2015 the federal spending on the social security and
Medicare was 23% of the total federal budget for a fiscal year.