American Economics Thread

[SlothmanAllen]

While the US economy in aggregate might be doing better than EU or Japan, I think there are other factors that are not doing so well. For example, life expectancy has gone down recently and is behind the rest of the developed world. Infant mortality has also been rising. The political system is also dangerously fractured right now, with the Republican party being overrun by MAGA morons who push extremist domestic policies and could potentially cause a global catastrophe if they get enough domestic power. Another problem is immigration, which has been declining.

They're doing miles better than UK or Japan, I'll give them that any day on the week. They're basically doing as good at their best as China at its worst. Which sounds bad but it's absolutely not bad for the no2 economy.

If China can achieve successful growth when US had overwhelming economic advantages, why can't the US also achieve healthy growth with a strong China? I find this type of black or white thinking unrealistic. I believe both economies will eventually learn to work with whatever economic balance they arrive at.

 

[HighGround]

Besides China is not yet getting the stability dividend from being the major global reserve currency yet, and US has yet to feel the full shock of being reduced to a bilateral settlement currency. Yet even in this situation, China maintains a stronger economy, larger market, more globally controlling tech and industry sector and higher scientific output. So if US doesn't use the time it has left to somehow get 10% growth and quickly run past China, the chances to do that will disappear permanently.

For this century sure, but things change and they can change quickly. Empires don't always last, black swan events happen. Complacency is how United States got its problems in the first place.

 

[TK3600]

I believe both economies will eventually learn to work with whatever economic balance they arrive at.

I sure hope that is what ends up happening. I don't want a white India that remain bitter forever and never cooperate.

 

[USTBasisRollCarry]

March 2023 Industrial Production: +0.4% MoM of which
- Manufacturing: -0.5% MoM
- Utilities: +8.4% MoM
- Mining: -0.5% MoM

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[broadsword]

For this century sure, but things change and they can change quickly. Empires don't always last, black swan events happen. Complacency is how United States got its problems in the first place.

Well, there are such people already. I pray they don't rise to become decision-makers of the country.

 

[lube]

If China can achieve successful growth when US had overwhelming economic advantages, why can't the US also achieve healthy growth with a strong China? I find this type of black or white thinking unrealistic. I believe both economies will eventually learn to work with whatever economic balance they arrive at.

It depends exactly how much the US benefits from immigration. While US primary and secondary education is falling behind, immigration is papering up the cracks.

If the rest of the world becomes richer and more educated, does it make it harder to keep up that level of brain drain the US has historically enjoyed?

If the US attracts less of the global 1% wealth and talent and makes up for it with less skilled immigrants, that's a permanent loss of competitiveness.

 

[FairAndUnbiased]

It depends exactly how much the US benefits from immigration. While US primary and secondary education is falling behind, immigration is papering up the cracks.

If the rest of the world becomes richer and more educated, does it make it harder to keep up that level of brain drain the US has historically enjoyed?

If the US attracts less of the global 1% wealth and talent and makes up for it with less skilled immigrants, that's a permanent loss of competitiveness.

interesting pattern: US has to have more than ~6x the GDP per capita of a country to attract immigrants to it. once it drops below ~4x or so it really dries up.

 

[xypher]

interesting pattern: US has to have more than ~6x the GDP per capita of a country to attract immigrants to it. once it drops below ~4x or so it really dries up.

I think it should be more or less the same for all countries. Western propagandists love pretending that people migrate there because of "freedom, human rights" or other key propaganda words but in reality it is the economy. The absolute majority of migrants are economic, ideological/political migration is tiny compared to them. So when the Western economies start declining, the process will enter a downward spiral with falling birthrates (people are reluctant to make a family during crisis) and becoming less attractive to immigrants.

 

[FairAndUnbiased]

I think it should be more or less the same for all countries. Western propagandists love pretending that people migrate there because of "freedom, human rights" or other key propaganda words but in reality it is the economy. The absolute majority of migrants are economic, ideological/political migration is tiny compared to them. So when the Western economies start declining, the process will enter a downward spiral with falling birthrates (people are reluctant to make a family during crisis) and becoming less attractive to immigrants.

here's the source:

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really good interactive graph. recent numbers also support this.

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pg. 12. data for 2012-2021.

 

[USTBasisRollCarry]

0.4% MoM is not an unheard of number. During "normal" years it would not be unusual to see 0.5% MoM or higher. It all depends on how it adds up at the end of the year.

Uh no. The last time core CPI MoM before the pandemic was >0.5% was in the 30 years ago

I would also add, that an annualized rate of 4% or under would be a significant accomplishment for the Fed, and set the track for an even better year in 2024. Relatively high inflation for roughly 2 years before gradually coming back down to normal within another 2 years is not awful.

No, it's not. The 2H Fed Summary of Economic Projections (SEP) had inflation <2% with lower interest rates

By comparison, even with the Volcker shock, it took significantly longer to take down inflation and at a significantly higher cost. Being unemployed is a lot more unpleasant than things being 10-15% more expensive in aggregate.

Agreed

0.4% MoM is not an unheard of number. During "normal" years it would not be unusual to see 0.5% MoM or higher. It all depends on how it adds up at the end of the year.

I would also add, that an annualized rate of 4% or under would be a significant accomplishment for the Fed, and set the track for an even better year in 2024. Relatively high inflation for roughly 2 years before gradually coming back down to normal within another 2 years is not awful.

By comparison, even with the Volcker shock, it took significantly longer to take down inflation and at a significantly higher cost. Being unemployed is a lot more unpleasant than things being 10-15% more expensive in aggregate.