So Much for Free Trade, Budget Deficits

 Article: "Trump's Biggest Economic Legacy Isn't About the Numbers," The New York Times, October 24, 2020

The above article indicates that voters continue to rate the economy as the best aspect of Trump's presidency. Before the pandemic, the United States had record low unemployment, increasing incomes, and rising investment. But, the author of the article argues, this will not be Trump's legacy, no matter whether he wins or loses the election. 

Trump's main economic legacy will the tonal shift he caused in economic discussion within both parties. Previously, both Democrats and Republicans emphasized the positive effects of trade deals, largely ignoring the complaints from their rank and file supporters that globalization meant fewer American manufacturing jobs. Now, after nearly four years of Trump, both major parties have begun to backtrack on globalization. Even Joe Biden, who is not nearly as keen on striking "deals" to benefit American workers, has a plan to keep manufacturing at home. 

Further, Trump has ended much of the hesitancy within the Republican party about deficit spending. Of course, Republicans had long in fact been in favor of deficit spending (so long as it was on grossly disproportionate "defense" spending), but Trump has emboldened Republicans to admit that deficits do not matter in the short term. 

I find the former shift to be rather short-sighted. Both parties need to concentrate on helping workers adapt to the disruption that will come with increased automation, decentralized work, and businesses that will look remarkably different from those of the 20th century. We should not stifle long term growth in an attempt to realize a completely romanticized version of the past. 

As for the latter, this is a welcome realization. So long as the parties are not too exuberant in their spending, spend on the right things, and recognize the long term consequences of deficit spending (which, of course, is asking for more than a lot), the deficit should not be much to worry about. 

What do you think? Is the backlash against free trade justified? What about the new attitude toward deficits? 

Unemployment Claims Are Down, but Many Workers Lower Expectations

 https://www.nytimes.com/2020/10/22/business/economy/unemployment-claims.html

Those temporary layoffs are lasting a lot longer than expected due to Covid, and there doesn't seem to be an end in sight due to the new wave. The number of people applying for unemployment has fallen, but still at an alarming level. Senate Republicans are fighting against yet another stimulus. People are now changing expectations now that these changes seem to be permanent. We are starting to see people leave the labor market altogether. Only 53% of those laid off due to the Coronavirus have returned to work. This number is too low. Only 39% thought they would go back to their jobs, however. How do you think the decrease in the people in the labor force will affect the upcoming election? 

The Greater Recession coming on its way

Federal benefits being suspended would create a lot of damage almost as terriying as the economic effects of the coronavirus. We all know that when the Trump administration declares something, almost the opposite will happen. Like in February when Trump declared that the number of cases would soon go close to zero, we saw a huge pandemic that arose. When Vice President Mike Pence insisted in mid-June that there would not be a second wave of the coronavirus, many new cases and deaths arose. When Larry Kudlow, the administration's chief economist declared that the downfall of the economy that the US faced, would be recovered with a "V-Shaped Recovery", we all saw what happened next. Federal benefits such as stimulus checks across the country to the unemployed was greatly beneficial to those people as well as the consumer spending in the country. However, due to these checks, the government expenditure rose about $300 billion which means that the government had to print more money which in turn caused inflation. Two-thirds of business economists in the US expect a recession to begin by the end of 2020. We all have seen and know where the economy of the US is going towards which is downwards. So, what do you guys think would be a better solution by the federal government in order to avoid the recession and cause the US economy to regain its flow? Citation: Krugman, P. (2020, August 6). Coming Next: The Greater Recession. Https://Www.Nytimes.Com/#publisher. https://www.nytimes.com/2020/08/06/opinion/coronavirus-us-recession.html

Will Trump’s Illness Slow the Economy’s Rebound?

When Trump had the coronavirus, people thought the state of his health would have varying effects on the economy depending on how he progressed. Depending on how Trump progresses with the virus, he could “dismiss the virus as no worse than the flu, inciting his followers to remain massless, or he could be chastened by the experience and urge them to take the disease seriously, says Schenker. Since Trump had first hand experience with the virus, his followers will believe him more because they will deem him a credible source. “Bloomberg Economics estimates the U.S. economy grew at an annual rate of 28% in the third quarter but will grow at a rate of just 2.5% in the fourth quarter.” How did you expect Trump’s diagnosis of the coronavirus to impact the economy?

Article Link: https://www.bloomberg.com/news/articles/2020-10-02/will-trump-s-illness-slow-the-economy-s-rebound

Budget Burdens: Budget Deficit to hit 3.3 Trillion

The budget deficit for 2020 will be a historic 3.3 Trillion dollars. This is caused by the massive amount of spending the government has done, and less taxes it is collecting. The government loves to spend money, even in normal years. This year, because of the virus and the recession, their spending has only been exacerbated. Not only did they spend more, they also collected less in taxes. Many people stopped working, so the government did not receive all those taxes associated with working. The 2017 tax cut also, for the last 3 years, have decreased the total amount of taxes coming in. These two things together exploded the deficit to new levels. We are in the middle of a pandemic and a recession, so it is easy to justify this spending, especially if it is going to a good use. But in the long run all this government spending will lead to crowding out of private investment, lowering out net exports even more, and hampering growth. There is this trade off we have to deal with, and finding that balance is a point of contention.

https://www.cnbc.com/2020/09/02/budget-deficit-to-hit-record-3point3-trillion-due-to-virus-recession.html

The Economic Impacts of learning losses due to Covid-19

The pandemic has caused more than 1,700 American colleges to shut down and start studying remotely. These colleges have also given the option for students to defer their semester until later or study remotely. Most students come to college to have the college experience and to learn which they can do better in person. However, due to this, most students have deferred their college semesters causing a semester late graduation. This will cause students to complete their undergrad later which in turn will cause a lot of these students to not be available for jobs that early which in turn means there will be lesser labor available for companies to hire. This will cause productions to decrease and hence GDP to decrease as well since supply would not be able to meet the demand curve. A learning loss equivalent to one-third of a year of schooling for the current students is estimated according to historical growth relationships to mean 1.5% lower GDP on average for the remainder of the century. And this only talks about one-third of a year, and if we imagine all colleges decreasing the number of outputs of college graduates, this will surely have a huge effect on the GDP. This 1.5% loss in future GDP would be equivalent to a total economic loss of USD 14.2 trillion. The US is already in a lot of debt due to covid-19, therefore, adding these losses of GDP to the debt will cause it even harder for the economy of the country to ever make a comeback in the coming future. Do you guys think this is a genuine problem for the US economy or will it have minimized by other factors? If so, what are those factors? Citation: Hanushek, E. A., & Woessmann, L. (2020, September). The Economic Impacts of Learning Losses [PDF]. http://www.oecd.org/education/The-economic-impacts-of-coronavirus-covid-19-learning-losses.pdf

Future of Student Visas in the US

After the election, Trump promised a stricter work visa regime in a bid to create more jobs for Americans workers. His view is that unemployment in the US is high so in order to decrease that number, he must impose stricter rules for students coming from abroad. Trump may be right as this would in fact, create more jobs for Americans which in turn would decrease unemployment. However, what Trump does not realize is that this same policy would work towards creating a downfall to the GDP of the country. Most of the businesses inside the US are worked by many international people. Even big companies like Facebook, Apple and Amazon have many managers, software developers that come from places in Asia like India, Pakistan and China. Decreasing the labor force would help increase employment for Americans but at the same time, it would also increase demand for labor and hence, even though income would go higher, it would mean that there would be lesser productions hence lesser products sold. If businesses do not thrive the way they have been running for a long time, it would not only specifically affect those businesses by making them let go of their opportunities to get the best employees from all over the world, it would also affect the country as a whole by decreasing consumer’s expenditure that would have been spent on productions made. This country was built on freedom yet there seems to be no freedom for people who are not nationals. Do you guys think unemployment is a more pressing matter than GDP? Or in other words, is Trump right about this or Biden? Citation: Online, E. T. (2020, October 1). The current status and likely future course of various work & student visas in US. The Economic Times. https://economictimes.indiatimes.com/nri/visa-and-immigration/the-current-status-and-likely-future-course-of-various-work-student-visas-in-us/articleshow/78422222.cms

China warns U.S. it may detain Americans in response to prosecutions of Chinese Scholars

The Chinese government is having some conflicts with US. The American justice department’s prosecution of Chinese military-affiliated scholars has caused the Chinese officials to issue warnings to the US government repeatedly to tell them that they should drop the prosecutions of the Chinese scholars otherwise, they will treat all Americans inside China as criminals. Even though bad relations between these countries will affect both, it would affect the US even more. The reason is because China leads the world by exports and the US imports from China are about 21.2% overall which is a huge amount of imports that the US would be dropping if they get bad relations with the Chinese government. The US government knows and fears that when that day does come when China stops trading with the US, it would affect the US GDP by a huge sum. The country is already in a lot of trouble regarding its wealth as it is being drowned by its own debt. If the imports from China are stopped, it would cause a downfall in technology as well as consumer spending because most of the demand of people are Chinese goods. The biggest categories of US imports from China are computers, cell phones, apparel, toys and sporting goods. A lot of these very same imports are from US manufacturers that send raw materials to China for low-cost assembly which now would take up more money due to the increased wage of labor in the US. Do you think it is smart of the US government to prosecute the Chinese scholars? Why and why not? Cited: O&Rsquo;Keeffe, K. (2020, October 17). China Warns U.S. It May Detain Americans in Response to Prosecutions of Chinese Scholars. WSJ. https://www.wsj.com/articles/china-warns-u-s-it-may-detain-americans-in-response-to-prosecutions-of-chinese-scholars-11602960959

The Future of Robotic Surgery

Robotic surgery, or robot-assisted surgery, allows doctors to perform many types of complex procedures with more precision, flexibility and control than is possible with conventional techniques. This is a newly emerging market and has massive potential for growth. The top 5 companies in this industry are Intuitive Surgical, Stryker, Accuray, Smith & Nephew, and Mazor Robotics. With the continuous advancement of technology I believe there is no doubt that this industry can 10x in size in the next 5-10 years. There are so many benefits to robotic surgery that it is honestly a no brainer that the industry will succeed. Keep in mind that the surgery is not done solely by the robot itself, the doctor controls everything the robot does but the incisions that the robot makes for example are far better than most humans can make. With this emerging market I can see the United States economy improving as people will feel safer going in for surgery and they will be able to return to normal life quicker than before. What do you guys think? Would you be ok with robots helping with your surgery?

https://idataresearch.com/top-robotic-surgery-companies-in-the-united-states/

US Economic Recovery = Uneven

    After many businesses went under due to the coronavirus, some parts of the US economy are coming back strong. In some parts the economy is rebuilding and booming in a good way, but in other parts of the economy it is lacking tremendously. Federal Reserve Bank of Atlanta President Raphael Bostic recently said in an interview recently, "But in other segments, things like hotels and restaurants, small businesses, particularly in minority and lower-income communities, those places are seeing much more difficult situations.” Many hotels and small businesses across the globe have gone under do to the economy not boding well in their favor.

    While the US has seen a boost in the economy, we are expected to see a spike inPositive COVID-19 cases in the coming months. This could turn out badly for the rebounding businesses but even worse for the businesses that have been heavily struggling. Congress aren't necessarily helping the situation also due to their failure to agree on a fresh stimulus package. This is expected to slow the labor market down, even though we have seen a terribly slow labor market as of recently. How long can America's economy suffer before jurassic measures are taken place?

https://www.washingtonpost.com/business/on-small-business/feds-bostic-cautions-that-us-economic-recovery-is-very-uneven/2020/10/18/36dc4498-115d-11eb-a258-614acf2b906d_story.html

Speaker Pelosi Sets a 48 Hour Deadline for Coronavirus Stimulus Deal

     After weeks of stalled negotiations and ultimatums on both sides, House Speaker Nancy Pelosi issued a 48 hour deadline to the White House if a deal is to be reached before the election.  The Speaker was on the Sunday talk shows this morning and told ABC's "This Week" that she was optimistic but she also said a resolution "depends on the administration" which may signal she's not willing to move much from her position.

    Speaker Pelosi has been negotiating directly with Secretary of the Treasury Steve Mnuchin and they remain apart not just on the dollars to be allocated, but also on how those dollars will be spent.  The Democrats are pushing for money for testing and contract tracing and the Republicans want a much smaller bill that just focuses on Paycheck Protection programs and expanded unemployment benefits.

    Hopefully both sides will come together on a relief package.  Something is better than nothing for communities and families that are hurting and both sides issuing ultimatums isn't helping anyone.

https://www.politico.com/news/2020/10/18/pelosi-clarity-coronavirus-relief-430061

Expiring benefits raise economic stakes of stalled stimulus talks

 The article starts out by discussing how the government has been unable to pass another stimulus bill before the elections, which will cause more damage to the economy. With the focus on the elections now, there is less likely to be a solution for struggling businesses until possibly next year. Additionally, the outcome of the elections is expected to scramble the politics of the stimulus bill, causing a further delay. Waiting for increased unemployment benefits, helping small businesses, health efforts to fight against Covid, and increased funding will cause even more damage to the economy. While we have seen some improvement, growth is still low, with expectations to recover as late as the end of 2021. Additionally, U.S. economist Beth Ann Bovino said the labor market is not expected to fully recover until 2024. The predictions are only based on another stimulus bill.

Do you believe these predictions are accurate and require another stimulus bill? 

link:

https://thehill.com/policy/finance/521486-economic-recovery-looks-bleak-as-coronavirus-relief-talks-continue-to-falter

'I'm Still Unemployed': Millions In Dire Situation As Savings Start To Run Out

Millions of Americans are still unemployed with many permanent job losses due to the pandemic. The government stimulus package of $600 was the life boat for many unemployed Americans during the lockdown but with the leaders in Washington unable to reach a consensus stimulus package before the November election, those still unemployed are floundering to stay afloat as savings are slowly depleted with the lack of additional support from unemployment benefits. Job growth has slowed down while layoffs have continued with unemployment claims growing. 

This uncertainty surrounding the new stimulus plan has pushed individuals and families to dive into savings that were accumulated during the lockdown or attempt a side job while continuing to search for a permanent job just to earn a bit more money. Before the pandemic, job searches were already difficult to do with finding one that fits ones preferences and job skills but with the pandemic still going on and the general uncertainty of the US economy, job searching is even harder despite the desire to work. 

https://www.npr.org/2020/10/17/924682991/i-m-still-unemployed-millions-in-dire-situation-as-savings-start-to-run-out