The Bureau of Economic Analysis of the U.S. Department of Commerce recently released data that the annual GDP of the United States will shrink by 3.5% in 2020. This is more than the impact of the 2009 financial crisis on the U.S. economy. With the exception of government spending and the real estate market, almost all economic areas have experienced recession.
Consumer spending, which accounts for more than two-thirds of GDP, fell 3.9%, a record since 1932. Unemployment rates reached a staggering 14.7% in April and then began to fall, but by December it still reached 6.7%. The coronavirus pandemic has cost the U.S. economy 9 million jobs, with an average unemployment rate of 8.1%.
An important reason for the U.S. economy to fall into the current situation is the policies of the previous government. Trump spent a lot of time competing with the outside world and “blaming the pot”, delaying larger-scale investment in medical care, education, scientific research and reform of the domestic distribution system. The result was four years of shouting the slogan “Make America Great Again”, leaving office with a poverty rate growth rate breaking the record of more than 50 years.
In the second half of 2020, the number of poor people increased by 8 million, and the society was highly divided and confrontational. When he ran for president in 2016, Trump promised to drastically reduce the trade deficit after being elected, but by the end of his term, the U.S. trade deficit was $645.2 billion, an increase of $142.9 billion over 2016.
Now Biden is expected to rectify his predecessor’s policies, but it is still unknown whether the new government can push the U.S. economy out of the quagmire of the coronavirus crisis as soon as possible. The Biden administration must race against the spread of the epidemic and the mutation of the virus, but when he took over the White House, he found that the data left by his predecessor were incomplete and the research and development and production of domestic vaccines were seriously lagging behind.
Biden has proposed a huge economic stimulus plan, but it is still doubtful whether it can be launched as soon as possible. Although Democrats took both the House of Congress, they did not have strong control over the Senate.” Long debates” may still hinder relevant legislation. Biden’s final stimulus plan may shrink in size and delay.
On February 8, the Senate will start the impeachment debate against Trump. Judging from the time taken of the three presidential impeachments in history, the shortest is the first impeachment against Trump, which took 49 days, and the longest impeachment against President Andrew Jackson, which took 91 days. Biden’s plan will be “disconned” by the impeachment bill, and may not finally be approved by Congress until April. The U.S. economy, which has not been waiting for the stimulus plan to be implemented, may experience large fluctuations in the stock and bond markets.
In order to push the U.S. economy out of the crisis as soon as possible, in addition to continuing to seek congressional approval for the economic stimulus plan, an important way for the Biden administration is to rehabilitate relations with the international community, including China, work together to fight the epidemic, reduce barriers to international trade and investment, and continue to promote globalization.
According to a study jointly released by the National Committee on Trade between the United States and China and the Oxford Institute of Economics, the U.S. export industry to China has provided 1.2 million jobs to the U.S. market. Just one initiative to phase out the tariff policy and promote the development of bilateral trade will bring 145,000 to the United States in the next five years. Employment position. In the next 10 years, China’s development will drive one-third of global economic growth, and China will become an important engine of the world economy.
Therefore, if Sino-US economic and trade cooperation can be strengthened, it is not only a rational and realistic option for the Biden administration to revitalize the U.S. economy in the short term, but also a way to promote common prosperity.
