Daniel Lacalle legt uit waar de problemen van de Amerikaanse economie de komende tijd zullen zitten, en waarom dat de positie van de dollar onder druk zet.

The first thing any economist should do wen reading a budget proposal is to analyse the basic macro assumptions and the results presented by the administration. When both are poor, the budget should be criticised. This is the case of the Biden Budget Plan.

Same growth, a lot more debt and less employment.

According to the administration, the impact on growth of this budget will be negligible, as their own -and optimistic- estimates see no change in the slowdown of the U.S. economic growth trend.

The CBO (Congressional Budget Office, The Budget and Economic Outlook: 2021 to 2031) estimates a 1.7% average real growth in GDP between 2020 and 2030, the same average they forecast for the 2025-2030 period. This is lower than the potential real GDP growth of the U.S. economy but driven by much higher debt… with lower employment.

The CBO also expects an extremely poor job growth, with the unemployment rate at an average of 4.8% in the 2020 to 2030 period, a 4.1% for 2025-2030. This means not achieving the unemployment rate of 2019 even by 2030 after spending $6 trillion.

Even more concerning is the massive deterioration of the financial position of the United States.  The Committee For A Responsible Federal Budget (CFRB) warns that “Federal debt held by the public would rise from 100 percent of GDP at the end of FY 2020 and a record 110 percent of GDP in 2021 to 114 percent of GDP by 2024 and 117 percent of GDP by the end of 2031. In nominal dollars, debt would grow by $17.1 trillion through the end of FY 2031, from $22.0 trillion today to $39.1 trillion in FY 2031” (President Biden’s Full FY 2022 Budget).

This is a concern because history shows us that these estimates tend to err on the side of optimistic and that debt rises faster.

Verder lezen kan hier.

Duur 7:34 min.

Publicatie 30 mei.