A look into 2022: The current state of the American Economy

Photo Credits: David Vives

 Introduction

America is heading towards a worldwide financial collapse. Much of the collapse can be attributed to the U.S. government’s $21 trillion debt. The U.S. dollar is losing purchasing power, and countries worldwide are moving away from using it in trade.

Government spending has increased by more than $2 500 billion per year in the past ten years, and tax revenue was only $3–214 billion in 2016. The debt has gone up to $21.9 trillion in the past year, or $49, 000 per American.

History

In the early 1900s, the U.S. economy grew faster than the world average. The American dollar was used to pay for the entire world, but that is no longer the case. Many countries are turning to other currencies that can keep up with their currencies’ high purchasing power, such as the Chinese Yuan, the Venezuelan bolivar, the Brazilian real, and the Indian rupee. Changing currencies will not be easy as some countries have a lot of money invested in the U.S. economy.

State of the economy

Photo Credits: Kenny Eliason

Many countries are hesitant to re-enter the global economy unless the United States agrees to their terms. The Chinese Yuan would fill the void that the U.S. leaves, as it is the second-largest reserve currency, but the U.S. might not have enough to meet the demands of all its trading partners. The United States can manage its currency by selling some bonds. However, since many countries have to purchase food, gas, or other essentials from the United States to meet their inflation requirements, the United States is in a terrible position.

China is reluctant to buy the bonds, so the United States cannot sell them without negotiations. China can buy weapons from the United States as it did after the Korean War in the 1950s and 1960s.

President Nixon’s attempts at lowering inflation fell flat, so the Federal Reserve took over and implemented an “inflationary” policy of inflating the economy. At first, this policy succeeded in raising interest rates, which improved capital investments and expanded trade.

Those who wanted credit purchased the bonds. But the rise of inflation hurt these individuals and others who depended on inflation to maintain their wealth. Higher interest rates, lower interest payments, and higher inflation reduced the value of savings for Population Growth.

The federal government

Since the 1960s, the population in the United States has increased from 142 million to over 300 million. To maintain the current number of “industrial” workers and police, gangs, military, and government, the Federal government generously finances the swarming hordes of mother people who have invaded the nation.

Photo Credits: Chad Stembridge

To expand the federal welfare state, the government has created trillions of dollars of credit (e.g., government, FDIC, and FED-reserve credit) to subsidize wasteful, extravagant, etc. (Look at the $14 trillion in 2000 national debt, growing at “$250,000,000,000,000.00” per year.)

The U.S. Federal Government’s Credit Card Bill is $60,000,000,000,000 per year. Since there are no limits to the expansion of federal debt, what the government can borrow (to ‘fund’ current and future state spending) is limited only by the willingness of fiat-money-printing central banks to buy up the government’s debt (programming their computers to expand the money supply) and to lend it, gratis, to the government via the federal- and state-run FED and its respective state central banks. 

In the end, the federal and state governments want to spend your money — to build more tanks, submarines, aircraft carriers, F-35 fighter jets, combat drones, air-to-air missiles, and B-2 bombers, to buy more bullets and make more bombs, and to pay the salaries of more government workers, government public school teachers, government public university professors, state and federal judges, officials and politicians.

Government has a voracious appetite for your tax dollars — please don’t frown too hard … roll your eyeballs in disgust … or strike one’s self with a fist. The federal government and its state and territorial counterparts want your money — don’t ask why, why, why. Aunt Sally and her poisonous ways are doing great harm to America. Do you agree with this?

The bad news is that savings rates will remain at 2 percent in 2022. But what does it mean for savers? In short, it means that your overall savings rates are still usable. However, there are a few ways to maximize your savings rates to ensure that you have more than enough when it’s time to retire and spend your money.

Conclusion

The cost of living always seems to be increasing, but, in reality, the expenses may not go up much. Due to inflation and the deteriorating economy, people will have to dig deeper into their pockets to cover their bills. In the American economy, however, inflation is predicted to drop from 4.1% in 2022 to 2.6% in 2023. In addition, the Federal Reserve has targeted a 2% inflation rate by then.

The manufacturing sector will shed jobs while we will see a boost of jobs in the e-commerce sector. As tough economic times bite, there will be a huge decline in jobs in the consumer rental and wired communication sectors.

Lastly, the Federal Reserve has projected a lower 2.8% increase in the Gross Domestic Product in 2022, followed by a 2.2% improvement in 2023 and a 2% rise in 2024.