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#201 Dollar as the Dominant Global Currency








SOURCE: https://medium.com/galaxy-digital-research/on-free-markets-for-money-d99f80c6dd7f











#201 Balancing the Budget Trough Tax Reductions






The current prospects for the US economy is to cut the taxation levels.
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The USA has the world's largest GDP and the ratio of its public debt to GDP remains at  tolerable levels.
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Although the total tax revenue of $3.5 Trillion can not substitute for the post COVID GNP gap, increasing taxes and some tax reductions will be on the agenda for the new administration.
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The top income quintile and particularly the top 1% will be targets for increased taxation of incomes. However, the large accumulation of assets (> 50% of wealth) will be among the top 1% will most likely be the targets. As the workforce declines there will be no incentives to raise payroll taxes.
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#199 Global Statistics




The huge decline in fertility rates from an average of 5 children/woman in 1965 to 2 children/woman largely reflects increased  progress in childcare to  rising survivability of born children.
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The world population increased from 2.5 billion in 1950 to 7.9 billion in 2020. That is an addition of 5.4 billion people in 70 years, or a 216% gain. 
For the remainder of this century, or 80 years, the world population will level off at 11 billion. That is an addition of 3.1 billion people, or a 39% gain.
The huge increases in the global population during the past 70 years will never be matched again by increases in the next 80 years.
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As the population ages and the number of people in the workforce declines it will require increased welfare payments for an economy to support the aging population. That will require more taxes and immigration from low-wage countries. 
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#200 November 26 2020 USA Assessment




The current BEA forecast projects recovering to the prior peak of $19.5 trillion by the end of 2021. The prior projected levels of $21 trillion are not reached until sometime after 2025. 

How credible is the BEA forecast? It presumes the resumption of the GDP at rates at least equal to the 2014-2018 period when GNP was stimulated by steep increases in debt, a rise in the budget deficit and huge trade deficit.

We doubt the BEA forecasts because a recovery from unemployment cannot take place without an unaffordable increase in debt or a massive upward shift in workforce participation. There are many GDP downward drafts we will track, such as increases in the unemployment in clerical and administrative positions,  reduced corporate profits from increased taxes and the continuation in deficit balances both in trade and federal government.  
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Personnel over the age of 55 will be showing the most decline as younger and less expensive workers will displace the largest part of the workforce. As government funded retirement pay vanishes, the traditional demographic patterns will disappear.
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By 2020 the USA has accumulated huge amount of debt which far exceeds its GDP. To restore its GDP growth would require greater profits (such as from a rising Trade Balance or new export products) or a substantial increases in unfunded debt (such as from cuts in welfare).

The most likely solution will be found in the devaluation of the dollar as the currency used in global trade. Depreciation of a currency is the usual method for dealing with a decline in the earning capacity of the GDP and with excessive debt. 


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With a large government and trade deficit it is hard to see how the US economy can recover to a positive GNP trend without a decrease in spending.


Corporate profits will be insufficient to compensate for government deficits.
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With a quarter of the workforce living in poverty and 30% of the workforce as food stamp recipients added social programs will not make a difference unless a highly productive workforce is created.
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There are about 12 million additional illegal aliens in the USA that require more unfunded social welfare support.
The resident illegal alien population is defined as all foreign The resident illegal alien population is defined as all foreign born non-citizens who are not legal residents. Most illegal aliens either entered the United States without born non-citizens who are not legal residents. Most aliens either entered the    United States without  inspection or were admitted temporarily and remained past the date they were required to depart.   Persons who are beneficiaries of Temporary Protected Status (TPS), Deferred Action for Childhood Arrivals (DACA) or other forms of prosecutorial discretion, or who are residing in the United States while awaiting removal proceedings in immigration court are included among the illegal alien population estimates.
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The purchasing value of dollar cash has deteriorated  in ten years (2010-2020) from 46 to 39 by 15%. 2010 assets of $1.5 million are now worth $1.26, or an annual depreciation of 1.5%*1.5= $2,250 which is tolerable.