ormance has complicated
the BLAIR government's efforts to make a case for Britain to join
the European Economic and Monetary Union (EMU). Critics point out,
however, that the economy is doing well outside of EMU, and they
point to public opinion polls that continue to show a majority of
Britons opposed to the euro. Meantime, the government has been
speeding up the improvement of education, transport, and health
services, at a cost in higher taxes. The war in March-April 2003
between a US-led coalition and Iraq, together with the subsequent
problems of restoring the economy and the polity, involve a heavy
commitment of British military forces.

United States
The US has the largest and most technologically
powerful economy in the world, with a per capita GDP of $37,800. In
this market-oriented economy, private individuals and business firms
make most of the decisions, and the federal and state governments
buy needed goods and services predominantly in the private
marketplace. US business firms enjoy considerably greater
flexibility than their counterparts in Western Europe and Japan in
decisions to expand capital plant, to lay off surplus workers, and
to develop new products. At the same time, they face higher barriers
to entry in their rivals' home markets than the barriers to entry of
foreign firms in US markets. US firms are at or near the forefront
in technological advances, especially in computers and in medical,
aerospace, and military equipment; their advantage has narrowed
since the end of World War II. The onrush of technology largely
explains the gradual development of a "two-tier labor market" in
which those at the bottom lack the education and the
professional/technical skills of those at the top and, more and
more, fail to get comparable pay raises, health insurance coverage,
and other benefits. Since 1975, practically all the gains in
household income have gone to the top 20% of households. The years
1994-2000 witnessed solid increases in real output, low inflation
rates, and a drop in unemployment to below 5%. The year 2001 saw the
end of boom psychology and performance, with output increasing only
0.3% and unemployment and business failures rising substantially.
The response to the terrorist attacks of 11 September 2001 showed
the remarkable resilience of the economy. Moderate recovery took
place in 2002 with the GDP growth rate ri