Over the past several decades, we have witnessed China's immense growth. Although, today, China is prone to a debt crisis due to its huge debt, we have observed how the Chinese economy has acquired huge growth rates over the years. In recent years, however, the Chinese economy certainly isn't the only one acquiring such growth. Another South- Asian giant, India, has incurred a GDP growth of 7.6 per cent in 2015-16, up from 7.2 per cent a year ago. With such high growth number, India has become the world's fastest growing major economy — surpassing even China. The various measures that the Indian government has been taking for the last couple of years, since Prime Minister Narendra Modi took office, seem to be working and creating a solid foundation for further growth in India. Although the fastest growing economies typically aren't among the largest and most developed ones, it is prominent that the two nations are developing rapidly.
China, today, is a manufacturing powerhouse and exporter, and many believe that its economy will outpace that of the US within the next decade. After the government of China initiated a major program of economic reform in 1978 by encouraging the formation of private businesses, liberalizing foreign trade and investment, and investing in industrial production and the education of its workforce, the country experienced a swift economic boom. The Chinese government currently faces major problems, however, as the country is transitioning into a consumption-based economy.
Similarly, FDI is a key monetary source for economic development in India. After economic crises in 1991, FDI has played very important role in bringing economic liberalization in India. It is estimated that India will overtake both China and US as preferred destination for FDI in the coming years. In the first half of 2015, India encouraged investments of $31 billion while China and United State of America could mobilize $28 billion and $27 billion, respectively. These data even motivated the Indian government to amend its FDI policy. As per current data, in 2016, India has become the top destination for FDI. Since 1991, dramatic changes have been observed in India, whereas, China has built up an enormous infrastructure capacity.
American economy, on the other hand, is a developed economy and has significantly progressed a great deal since the Great Recession. Nevertheless, the nation faces a set of core challenges to building an economy that will contribute to a continuous and long- lasting economic prosperity.
Therefore, whichever candidate prevails next month will need to be well- equipped to solve the real problems that drive higher budget deficits, which is enormous government spending. Now the real question arises-- how should the U.S. maintain superior growth in the face of this spending spree?
Although deficits do not necessarily always hurt the economy, they certainly do signal government spending that will have to be paid for, at some point of time, with even higher taxes. The alternative is a still-larger central government that crowds out investment and utilises resources from the private sector.
Next month, the American voters will choose whether to continue on the current economic path or set out on a different one. Hillary Clinton might approve one of the biggest tax increases, whereas, Donald Trump's plan might add trillions to the debt. For once, Americans truly have a choice between two distinct economic policies, a choice about the country's economic growth and individual prosperity. May the best candidate win!!
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