The United States of America is in need of a fresh start to achieve the leadership status it once held in the global economy. But right now, the U.S. is struggling with inflation, which makes everything less affordable. The current chairman of the Federal Reserve, Jerome Powell, has led a charge to stop prices from rising. The Fed is responsible for creating, organizing, and implementing monetary policies based on economic trends and forecasts of the economic direction of the country. Powell, a Washington D.C. native, is serving his second term as chair since being appointed in 2018 and strives to “make America great again” as best said by former president Donald Trump. But at the moment, he can’t do that without help from Congress.
The pandemic affected global economies drastically and revealed weaknesses in the American economy. The prevailing weaknesses are primarily in the supply chain and dependency on imports from competitors, namely in semiconductors (“computer chips”) from China. Semiconductors now go in most consumer electronics, so when they’re not available, everything from cars to phones gets more expensive, which drives inflation.
In 2021 Congress enacted the Chips for America Act, or “Chips Act,” followed by the CHIPS and Science Act in early 2022 to foster the implementation and expansion of the programs within the 2021 law. Combined, the policies are an effort to increase available jobs nationwide, mitigate the country’s dependence on imports, and reestablish America’s status as one of the leading global producers of semiconductors. The United States currently produces 12 percent of the world’s semiconductors, which is a significant decline from 39 percent in the 1990s.
The bills contain $250 billion for manufacturing and research and development of semiconductors. That makes the CHIPS and Science Act one of the largest publicly funded initiatives in the history of the United States. The five year programs authorize the Departments of Commerce, Defense, and State to assist domestic manufacturers of semiconductors in production and expansion efforts, including provisions to prevent outsourcing to top competitors, including China and Taiwan.
Nearly 85 percent of U.S. productivity growth is from tech through partnerships between federal and private entities. The aforementioned policies encourage the construction of tech hubs across the nation, increase America’s competitiveness, and increase job availability nationwide. All of this sounds excellent and gives citizens hope for the future of our economy, but the funds are just sitting there waiting to be utilized. As the United States economy hovers at a recession state, the citizens are waiting with bated breath for relief and hopes of growth.
Despite the Fed’s gloomy economic forecasts, these bills are a step in the right direction to help boost economic growth in the United States and reestablish the international economic leadership role that is slowly fading away. If implemented properly, the bills will help lower unemployment and increase GDP for the United States through the increased job availability and production generated through the nationwide tech hubs. More skilled workers will be needed, and training should be provided to help fill the positions. The tech hubs will place the United States and its citizens in a position to compete with the world leaders in chip production such as China and Taiwan.
Erica Downing is a vendor with Street Sense Media.