Free «United States Debt and the Impact upon the Global Community» Essay Sample


Today, one of the major pressing issues is the growing and staggering foreign debt of the United States of America. The U.S. federal spending in 2013 coupled with its depressed receipts emanating from its weak economy has resulted into $850 billion deficit (Boccia, 2013). Based on this, the publicly held debt in the country is projected to exceed 76 percent of its gross domestic product (GDP) in 2013 of which the chronic deficit is predicted to push the U.S. debt to 87 percent of the economy in the coming 10 years (Boccia, 2013). Back in 1989, it was projected that the New York real estate investor, Seymour Durst, did spent almost $120, 000 in erecting a “National Debt Clock” in tracking the amount of money that the United States was in deficit of (Boccia, 2013). At that time, the country had a debt of $2.7trillion. However, that figure has continued to rise as the clock digit increased to a national debt of $10 trillion in 2008. This number is even projected to continue rising in coming years to digits exceeding more than $14 trillion.

The above facts are notably, what are essential causes of the U.S. debt and its impact on the global community. Currently, America’s dangerous high spending and debt which are on track to rise even higher has adversely been contributed to by its increasing entitlement spending. This on the other hand has placed the advanced economies such as United States at risk of “significant and prolonged reduction” in its economic growth, especially when its public debt is almost reaching the level of 90 percent of the GDP (Boccia, 2013). Additionally, its continued high public debt adversely threatens the private investment by driving the interest up and more significantly raising the price inflation. Moreover, the implication of United States debt would not only be severe and pronounced to the American citizens, but the global community as well.

It is notable that, the alarming increase of the unwinding U.S. debt has continued to impact negatively on the global community. The continued growth in U.S. federal debt would amount to increased probability of sudden fiscal crisis. This is because it will make investors to lose confidence in the government’s ability to effectively mange the budget (Boccia, 2013). This, in turn, would make the U.S. government to lose its ability to effectively borrow funds from investors at affordable rates thereby having significant negative impact not only on the country, but other global countries as well. Normally, the functioning of the world economic system as a whole and, more importantly, on the business policies that are being pursued in both developed and developing countries have brought about the impact of U.S. debt on the international community arena (Bonne & Kurtz, 2012).

Some scholars have cited the fundamental problem of the U.S. deficit as mainly contributed by the global monetary system that has maintained the U.S. dollar as the key currency (Kawai & Lamberte, 2010). In so doing, the United States has been allowed to run high deficits which prolong a situation where the capital flows from poor countries to the richest ones in the world. To such scholars, reforming the international monetary system in bringing the end of the hegemony U.S. dollar can be the best solution.

The inability to effectively incorporate the concept of business strategies in United States debt strategies has resulted into its uprising debt that has impacted differently on the global community. These debt strategies relates to the concepts of changing face of business, business ethics and social responsibility, economic challenges facing contemporary business, and competing in world markets. If properly devised, it can stimulate the manner at which U.S. utilizes its domestic and world economy. It is in this respect that this study discusses how the U.S. debt strategies relate to the above strategies and how this in turn impact on the global community.

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The Concept of the Changing Face of Business

The concept of the changing face of business especially in the contemporary 21st century is one aspect that if properly incorporated in United States debt policy can help reduce the deficit and its negative impact on global community. In a life span of 400 years, the United States business history has undergone six distinct time periods: the colonial periods, the industrial revolution, the age of industrial entrepreneurs, the production era, the marketing era, and the relationship era (Boone & Kurtz, 2012). All these periods are unique as they influenced U.S. business practices in various different ways. Currently, the U.S. economy is under relationship (which began in 1990s) but is characterized by ongoing links between individuals, employees, suppliers, customers, and other business (Boone & Kurtz, 2010). Taking note of this, the U.S. debt policy should consider implementing strategies that matches the changing face of business

Currently, the U.S. debt policy focuses on relationship management which is defined as a building and maintaining mutual beneficial ties with customers and other businesses (countries) through a collection of activities (Boone & Kurtz, 2010, p.17). In fostering this concept, the United States has devised partnership and strategic alliances with other organizations/ countries in order to take advantage of the available opportunities. The problem with such a strategy is that in enhancing efficiency, it results into inefficiency. For instance, in order to sustain the economic momentum in this challenging 21st century, the U.S. has continued to repay the debt of honor to its mutually related countries (developing countries). The major reason for this has been the need to foster loyalty while on the other hand it has amounted to the continued debt rising in U.S. (Kawai & Lamberte, 2010). However, this has made the global community which depends on U.S. to become more vulnerable to global imbalances associated with financial deficit problems.

The Concept of Business Ethics and Social Responsibility

The concept of business ethics and social responsibility is one which can adequately maximize the productivity or profit of U.S. revenue input. Business ethics can be defined as the principles and standards set out to outlay acceptable conducts in business organizations (Boone & Kurtz, 2010). This acceptability of business behavior can only be determined by the personal moral principles and values of each customer, organization, interested group, and government regulators. However, social responsibility is the business’s obligation of maximizing its positive impact and minimizing the negative impact on the society (Boone & Kurtz, 2010).  Therefore, business ethics and social responsibility are two distinct business aspects. The former is related to individual’s or groups’ decisions that the society do evaluate as right or wrong. On the other hand, the latter is one that concerns the entire impact of the business activities to the society. It is such concerns that must be considered in U.S. debt strategies to reduce the deficit rate.

One of the major causes of U.S. debt is the growing number of companies that faces accounting improprieties and securities frauds such the HealthSouth company (Ferrell, Fraedrich & Ferrell, 2012). The former CEO of the company, Richard Scrushy was indicted for allegedly conspiring to increase the firms’ reported revenue by $2.7 billion in order to meet shareholders expectations (Ferrell, Fraedrich & Ferrell, 2012). Therefore, whether the society and the global community judges that particular action as unethical or wrong, what comes out is that it affects the organization’s ability and the entire country in achieving its business goals. It makes it more difficult for the United States that has companies with reputations of acting unethically, to invest in other countries or seek assistance from the same in reducing their deficit.

The Economic Challenges Facing Contemporary Business

This concept if properly incorporated within the U.S. debt policy can help in offsetting the rising deficits.   It is important to note that economic systems that operate in different nations should reflect on the combination of policies and choices that the country makes in allocating resources among its citizens (Boone & Kurtz, 2012). This is because the choices that the U.S. government makes in allocating especially scarce resources affects each one of us since we are all involved producing, distributing, and consuming products. In essence, this “choice may be international in scope,” (Boone & Kurtz, 2012, p.68). However, U.S. has not devised its debt policies in a manner that attempts to address the economic challenges facing contemporary business. This is evident from its continued rise on its debts.

Ever since, the U.S. government’s expenses and revenue for the coming year has always been outlined by the Federal Budget that dictates the fiscal policy. The policy denotes the actions that the U.S. government can take to influence economic activity through offering important decisions about taxes and spending. It is meant to ensure that, even in future, the government does not spend more money than the amount it raises. The government should also avoid having budget deficit or borrowing more money to offset the deficit as this increases the national debt. However, the country’s revenue has continuously not been more than the country’s expenditure (surplus) due to its inability to effectively address the economic challenges facing contemporary business. These includes threat to international terrorism, the aging world’s population, the shifting towards global information economy, the growth of Indi and China that competes for available resources, and devise effort to ensure competitiveness in workforce (Boone & Kurtz, 2012). Significantly, these challenges have grown in importance as various economies become more global and countries become more connected.

Arguably, the monetary expansion temporarily lowers interest rates thereby leading to currency depreciation. While the U.S. fiscal expansion policy is clearly positive on the foreign income, its deficit raises the value of dollar thereby having contractionary effect on the rest of the world (Velloso Abbas & Park, 2007). Therefore, having the U.S. government spend more money than is available based on fiscal policy in creating a debt relief for the developing countries, negatively affects their economy on the other hand.

Competing in World Markets

The U.S. debt strategies have incorporated various policies in a manner that enhances its international business. This denotes why the country continues to spend more than is available to debt relief to other countries. This is due to the fact that U.S., just like foreign companies recognizes the importance of international trade in enhancing their future success (Boone & Kurtz, 2010). The economic interdependency has increasingly become a viable tool used in ensuring competition in the world markets. While U.S. has a combined exports and imports of approximately $3 trillion, similar to the national debts, it imports more goods than it exports. That is, U.S. spends more on expenditure than it gains in revenue. Importantly, much of that money spent on imports is refunded by the amount collected from foreign nationals visiting America (Boone & Kurtz, 2012). This shows the dependency of U.S. expenditure on foreign inclusiveness in order to compete in the world markets.

Similar to organizations competing in world market, the U.S. debt policy faces economic, political, social, and cultural differences that have resulted into its continued national deficit. The international business investment opportunity for U.S. organizations that results into considerable revenue depends on the stability of the political climate. Recently, the political issue concerning the rights of U.S. citizens over legal foreign workers in conducting companies’ employees’ lay off has been a big debate subject (Warnock, 2010). Therefore, by eliminating the pervasiveness of corrupt international legal regulations and laws coupled with U.S. prohibition laws that hinders American business people from investing on foreign countries, U.S. can maximize on its revenue production. This is because removing tariffs and administrative barriers that restrict trade would open free trade resulting into more revenue collection.


In conclusion, the United States debt strategies have not effectively incorporated the concepts of contemporary business strategies in the 21st century. Without policy framework that incorporates such concepts, American national deficit will continue to rise thereby negatively affecting the global community. This is because no single country can act as island of its own economy. Therefore, it is imperative for U.S. government to effective implement strategies that maximizes its revenue but minimizes its expenditure.


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