Economy

The United States has the world's largest economy by nominal GDP, but economic outcomes vary dramatically across geography, race, and class. Federal economic policy includes fiscal policy (taxation and spending), monetary policy (set by the Federal Reserve), trade policy, and regulatory frameworks for labor, banking, and commerce. The tax code shapes incentives for investment, work, and inequality — the 2017 Tax Cuts and Jobs Act significantly reduced corporate and individual tax rates, adding to the federal debt while boosting corporate profits. Trade policy is a growing site of political conflict: the Trump administration imposed broad tariffs in both terms, arguing they protect American manufacturing jobs; most economists argue tariffs raise consumer prices and risk retaliatory trade wars. Income inequality in the U.S. has increased significantly since the 1970s — the top 1 percent now holds more wealth than the bottom 50 percent combined. The federal minimum wage has not been raised since 2009, leaving it far below the cost of living in most major cities. Inflation in 2021–2023 reached its highest levels in 40 years, driven by supply chain disruptions, pandemic-era stimulus, and energy price shocks, before gradually moderating.