One of the main issues in the study of economics, as well as in the main direction of public policy research is the developments and changes to the long-term economic situation. Yet, in any professional discipline and field, there will be considerable difficulties to achieve accurate long-term predictions and judgments. Even if research results are produced, they can only serve their purpose as referential material. The same is true of this long-term forecast and judgment about the United States produced by ANBOUND.
We will first introduce the basic conditions for the long-term forecast in the United States. Firstly, global geopolitics is in the process of alternating turning points. China's Belt and Road Initiative (BRI) has created tensions in the global geopolitical situation, and the U.S.' geopolitical policies are also clearly under adjustment. It is also doubtful if Europe and the EU can maintain their relative stability. Secondly, the monopoly of the U.S. dollar system is in a precarious state. The United States has not found a reliable direction to maintain such a system under the conditions of digital currency and monetary easing. Thirdly, the global economy is developing, especially the economies of major countries. However, society is undergoing the transformation and the economy is becoming less important while the distribution of social wealth is becoming increasingly important. American society is continuing to bear rising debts. If the U.S. is to maintain its position as a dominant consumer in the world, its economic growth, as well as all sectors of the American society will need more money.
The focus of the logic used to build our analysis is that although there are various problems and major challenges, the U.S. economy is still a reliable one. The U.S. is still a major producing country, but unlike China and India, the "products" they produce are mainly technology products. As of now, the U.S. economy is still stable, and ANBOUND's previous forecasts indicate that the Dow Jones Index may break the 30,000 marks. Wealth is still being accumulated massively, though the real problem in American society lies in the distribution of wealth. The rise in household debt and youth debt is quite obvious. The U.S. government has implemented some limited debt relief measures in the past, such as subsidies for housing and pension subsidies for the elderly, among others. The results, however, are left wanting, and this has led to social dissatisfaction, which in turn has caused the influence of populism to rise sharply.
The election of Donald Trump as the President of the United States is just the beginning. The real question lies on whether he can successfully be re-elected for another term. On November 5th, a number of states in the United States ushered in election day. The former Republican governor of Kentucky, the current governor and Republican Matt Bevin lost to Democrat Andy Beshear, and this has shocked the Republican Party. In the 2016 presidential election, Trump had won Kentucky with a huge advantage of 30 percentage points. However, in less than three years, the state's political landscape has changed dramatically. Currently, among the elections of the four states, the Republican lost three of them and only won one, making the situation rather precarious for the Republicans. In fact, Trump's victory or defeat does not affect the long-term situation of the United States, because the direction of politics depends on the basic structure of the U.S. economy itself, and not its political leaders. The fundamental long-term problem of the United States is that no matter who is elected as its President, he or she must resolve the problem of wealth distribution. The best solution of this is to reform and realize universal health care.
Many people are unfamiliar with the economic, social, and wealth structure of the United States. The five major expenditures of American families are housing, transportation, food, insurance, pensions, and medical care. Combined, these few elements account for 81.1% of household expenditures. The latter three are related to universal health care. Among these, food expenditure is the smallest element, while housing and transportation are often related to work. Therefore, in the improvement of family wealth structure, the main issue would be universal health care. In addition, another major issue of concern is that the United States insurance industry, that comes in all shapes and sizes, is actually the pillar of the U.S. financial industry and one of its most important sources of funding. Hence, any developments in the issue of universal health care will seriously affect the U.S. insurance industry. The income will actually force the U.S. to undergo major reforms of the financial system. This is also because Wall Street is extremely concerned about the presidential election, particularly on the Democratic Party's performance in the general election, partly due to the fact that the Democrat is campaigning for universal health care.
In our analyses' logic, we also noticed a basic condition. Among the young people represented by American college students, the proportion of people who support the Democratic Party and the universal health care is very high, which means that the next few generations of Americans might also be supporters of universal health care. Wall Street used to be the dream place of younger generations, but that is now an occurrence of the past. The younger generations in the future can only rely on themselves, and universal health care can help to greatly reduce their burden. Looking from this angle, universal health care is equivalent to increasing the wealth-income of American families. Therefore, it is expected that future American society will continue to rise in support of universal health care, which is something that will be irreversible. The United States is also the only country in the developed world that does not implement universal health care, and this is becoming more and more unacceptable. Our logical explanation for these phenomena and facts is that the situation is irreversible and that it is only a matter of time before it happens.
What kind of impact does such a disruptive process have on American society, especially in the long-term society and economy? This is a question that must be answered with care.
My deduction and prediction of the U.S. economic and social development trend are roughly along these lines:
U.S. elections -> further focus on universal health care -> the current or future victory of the Democratic Party -> the formation of the universal health care system -> the insurance and financial system being affected -> Wall Street experiencing a downturn -> depreciation of the dollar -> bond craze cycle -> peak of infrastructure construction -> from a crisis to the basic stability, while achieving a certain degree of economic and industrial restructuring.
Universal health care is a major reform. The original Obamacare is only the beginning. The deepening of the reform will no doubt bring about uncertainties. Further, the social and industrial structures will change as well, which will inevitably be political chips in the United States that will also determine the election and the future of its political leaders. However, from a structuralist perspective, as long as the structure does not change, the trend will not change and neither will the path. During this period, there will be economic and financial crises, which will cause a certain degree of a shock though they will not affect the overall situation. After all, it is only something that other developed countries have already experienced. For the United States, this is just a redistribution of wealth and an opportunity for consumption to revive.
How will the United States achieve this political and reform process?
From a rationalist point of view, this will take 20 years, but from the current political process in the United States, it is very likely that it will commence in the second to third presidential terms. Will this then lead to the collapse of the U.S. economy, which in turn affects its existing global status? The results of the analysis show that there is a high probability that this will not occur, and indeed the outcome might be the opposite, which means that the U.S. will further strengthen its global status. The main reason is that, first of all, the climax of infrastructure construction can hedge the risk of Wall Street. This infrastructure construction is not just about building roads and bridges, but rather a high-tech construction high point which in its midst includes smart cities, medical welfare facilities, regional structural adjustments, environmental investments, and construction, etc. Secondly, universal health care is a process of wealth distribution and a matter of spending money; but infrastructure construction is a matter of production. This is both an investment and a money-making initiative, so the two can achieve hedging and support the long-term economic growth of the United States. Thirdly, the United States is a high-tech country. The realization of universal health care is conducive to further efforts in gathering outstanding scientific and technological talents all over the world that would be beneficial to its global competitiveness.
Therefore, looking at the long-term trend of the United States, the most crucial issue is its universal health care. It is not only a core political issue but also a key social issue. At the same time, it is also an extremely influential economic and financial issue. Now, the issue of universal health care has shone the spotlight on the important distinction between the Republicans and the Democrats. The Democrat has a scaled-down version of Obamacare, which is an important step towards realizing universal health care, while the first administrative order signed by Republican Trump after taking office was to halt Obamacare.
In this U.S. election, universal health care will certainly become the focus of controversy. In the case of state elections, Kentucky's Beshear said that if he won, he would help more people get Medicaid. Meanwhile, his rival Bevin adopts a stance that is the exact opposite, whereby he attempted to curb the expansion of Kentucky's Medicaid program and is pushing for cuts in local teachers' pensions. It is not hard for American voters to make their decision based on such a comparison.
The times are changing, and the United States is going through its own changes. Almost all of the current American universities are occupied by left-wing thinkers. Most of the next generation of Americans do not support Trump. Instead, they will lend their support to his predecessor Obama's policy. If the Republican's policy remains unchanged, a victory by the Democrats will only be a matter of time. The realization of universal health care will also be a matter of time. All of these make up the great changes that the United States is about to face.
