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.| ---------------------------------------------------------- |
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. | | ---------------------------------------------------------- |
| | 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.
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