Despite Omicron, skyrocketing prices, and unemployment worries, the US economy is expected to rebound in 2022.
West Virginia, an Appalachian mountain state, is one of the poorest in the US, with a strong reliance on coal mining for its wealth and energy demands.
It was in this state that John F Kennedy, armed with vast sums of money, first staked out his presidential credentials, persuading a Protestant Evangelical public that an Irish Catholic could win the presidency.
Six decades later, West Virginia is still in desperate need of levelling up, with 19% of the population living in abject poverty, some in tar-paper shacks in the hills' hollows. The mortality rate outnumbers births.
Despite its economic difficulties, West Virginia is a staunchly conservative state that was one of the first to vote Republican in general elections. But one of its senators, Joe Manchin, is a fiscally conservative maverick Democrat who is single-handedly opposing Joe Biden's administration.
The vow to 'Build Back Better,' an echo of Boris Johnson's election-winning phrase, was at the heart of Biden's campaign program.
After initially supporting the US economy through Covid-19 with cash giveaways that put thousands of dollars of spending power into the hands of every American citizen, Biden had planned to change the US in the tradition of Democrat forerunners Franklin D Roosevelt's 'New Deal' and Lyndon Johnson's 'Great Society,' after initially supporting the US economy through Covid-19 with cash giveaways that put thousands of dollars of spending power into the hands of every American citizen.
Biden had to rally the Senate's small Democratic majority, which is dependent on Vice President Kamala Harris's casting vote.
It just took one Democrat senator to cross the floor and vote with the Republicans to send Biden's £1.3 trillion infrastructure and social reform program to the scrap heap.
That's exactly what Manchin did when he told the White House he couldn't support the spending bill, which would push the federal budget deficit into the stratosphere while also adding to an already alarming inflation rate.
Surprisingly, repairing America's decrepit infrastructure of badly maintained bridges, rusty railway lines, and crumbling roadways, as well as four weeks of paid family medical leave and an extension of tax benefits for families with children, would have helped West Virginia.
Vice President Kamala Harris's casting vote is crucial to Biden's Senate majority (pictured)
+3
Vice President Kamala Harris's casting vote is crucial to Biden's Senate majority (pictured)
Manchin, on the other hand, couldn't bring himself to vote for a plan that included significant investments on combating climate change, a foe of king coal, as well as greater taxes on entrepreneurship and companies. On right-wing Fox News, the Senator claimed, "I cannot proceed with this piece of legislation." 'I've tried everything humanly possible,' says the narrator.
The infrastructure and supporting social measures were undoubtedly superfluous at the time it died in December in terms of immediate assistance for the US economy, rather than contributing to longer-term productivity increases.
The quick spread of Omicron across the United States, on the other hand, might alter American economic prospects and force a reconsideration at the White House and Capitol Hill if the pandemic's rapid recovery is disrupted.
So far, so good, with the Conference Board, a corporate forecasting organisation, stating that confidence was still climbing in mid-December.
However, the hazardous Covid infection rates now being reported across the United States will not be fully reflected in that study.
Prior to Omicron, the US economy appeared to be in good shape, with output increasing at an annualised rate of 7% in the fourth quarter.
GDP looked poised to be greater by the end of December 2021 than it was in the same quarter of 2019, and ahead of all other advanced countries except Australia, which has enormous natural resources.
The primary concern on the horizon has been inflation, with experts split on whether the 6.2 percent spike in consumer prices is a one-time occurrence or a return to the 1980s.
Nobel Laureate Paul Krugman, writing in his New York Times column, believes that inflation hawks are overreacting and that a little inflation beyond the mainstream central bank objective of 2% is beneficial for GDP.In his opinion, the danger is going too hard, as Fed chairman Paul Volcker did in the early 1980s, resulting in a devastating recession and long-term unemployment.
In fact, the United States is currently dealing with the exact opposite issue.
Before the collapse of Build Back and the rise of Omicron, private sector forecasts were predicting annual growth of 4.5 percent for 2021.
As a result, projections have been slashed by up to one percentage point.
This would result in a still-respectable 3.5 percent increase in output. In any case, the Build Back Better Act would have made little effect in its first year.
It was hoped that the concentration on infrastructure would trickle down to productivity and production over time, establishing a lasting legacy for Biden's first and likely only term in office.
The labour market is the subject that the Federal Reserve, America's central bank, is most concerned about.
As the country recovered from the pandemic, unemployment declined swiftly, with the jobless rate falling to 4.2 percent in November, but still higher than the pre-pandemic figure of barely 3.5 percent.The 'Great Resignation' is the name given to the enigma surrounding the US employment market.
These are the approximately 5 million US residents who were formerly employed but have voluntarily left the labour force.
Some of these individuals, like those in the United Kingdom, have concluded that they can make do with what they have in terms of income and savings.
Others are taking advantage of the opportunity to strike out on their own, following in the footsteps of the country's entrepreneurial traditions. As a result, the ratio of job openings to jobless persons has reached an all-time high.
In the third quarter, labour shortages pushed hourly wage prices up 6%. The Federal Reserve is especially concerned about this tendency.
Labour expenses are the greatest cause of increasing pricing for many American customers who spend a lot of money on services.
To make economic sense, salary increases would have to keep pace with productivity advances, which does not appear to be the case.
Despite all of the headwinds — Omicron, political gridlock, and rising earnings – the US has roared back and no longer appears to be losing ground to China, as was the case before the epidemic.
Because of the scope of US expansion, foreign corporations are focusing inbound investment on the United States rather than the Pacific or Europe.
Furthermore, American consumer demand has been sucking in manufactured products and rare commodities, exacerbated by supply shortages elsewhere in the globe, fueled in part by helicopter money deposited into people's bank accounts.
Biden may be striving to shift the political course of raw American capitalism with a more interventionist strategy, but he is presiding over an economic revival, Omicron excepted.
This is undoubtedly a result of Trump's predecessor Donald Trump's widely panned tax cuts for companies and entrepreneurs.
That is something that the chattering classes would want to remain silent about.
Comments
Post a Comment