Under the epidemic, the economy of every country has been severely impacted, and the United States is no exception. According to data, in just one week, the number of people applying for unemployment benefits in the United States reached 1 million, a record high. With the mutation of the virus, this battle against the epidemic has become much more difficult, undoubtedly causing more damage to the US economy. Great pressure. The economy is the lifeblood of a country. After Biden takes office as president, the top priority is to save the economic system that was crushed by the epidemic.
Hello everyone, here is what Lao Ru said, today we are discussing The topic is Biden’s 1.9 trillion aid plan, will it cause a new round of economic crisis
Biden’s 1.9 trillion aid plan:
On January 14, Biden proposed a 1.9 trillion aid plan. The main content of the aid is to ensure the sustainable development of American companies, accelerate research on the new crown vaccine, and normal school opening.
As the epidemic continues to spread, the number of unemployed in the United States has repeatedly hit record highs, companies are also facing serious losses, and the economy continues to be in a downturn. The 1.9 trillion yuan in aid funds this time is naturally impossible to obtain from taxpayers, and the Fed has begun to play its role again.
The United States is the world’s largest debtor country, since World War II , The fiscal revenue and expenditure of the United States have begun to be out of balance, and fiscal deficits are a common occurrence. After Obama took office, the total debt of the United States has already It reached 19 trillion yuan. After Trump came to power, he was profligate, spending money without restraint, and repeatedly pressured the Federal Reserve, making the United States’ The total debt hit a record high. One of the most common methods used by successive US presidents is to print money and issue national debt as long as the country runs out of money to ensure the operation of the economy.
Why are countries around the world willing to help pay for the debt of the US dollar? This involves a problem, and that is the Brettonson system established by the United States. The Bretton Woods system refers to an international monetary system centered on the U.S. dollar. During World War II, different countries competed with each other, leading to competing currency devaluations, and problems such as imbalances in international payments.
The dominance of the US dollar:
After World War II, the economies of Germany, Japan, and the United Kingdom were severely weakened, while the United States On the contrary, the economy is developing strongly and the amount of gold reserves continues to increase. By 1945, gold reserves accounted for 59%of the world’s total. It was also at this time that the United States and the Linkage successfully gained the position of world leader. At the beginning of the establishment of the Bretton Woods System, the United States advocated eliminating trade barriers and not allowing any malicious competition, such as competitive Currency devaluation, there are competitions such as restricting the free circulation of currency.
The words are pretty nice, but the American approach deviated from the original intention of the Bretton Woods system and ended in the Nixon administration in 1971. Although the system collapsed, the United States has become a credit currency in the full sense of the word, that is, supported by the national credit of the United States, the Federal Reserve will print as much as it wants, and the dominance of the US dollar has become the default fact of the world.
With”national credit” as the endorsement, the United States is even more unscrupulous. Once the country runs out of money, it will start issuing national debt. According to incomplete statistics, The United States now has 27 trillion in debt, and China is the largest creditor of the United States.
In the past 20 years, the Federal Reserve has gone through three stages. The first stage is that the growth rate of GDP is higher than the speed of printing money. On the whole, the US economy is still in a healthy state, and funding The rate of return is higher than debt, and social assets are on an upward trend. However, in 2008, because of the economic crisis, the Fed accelerated the pace of printing money, which resulted in a trend of flat GDP and debt. This time because of the epidemic, The debt ratio has been much higher than the GDP growth rate, so on the whole, the US economy has begun to have problems.
This time, under the influence of the epidemic, the trend of the US economy In the continuing downturn, in order to solve the predicament, Biden waved a big hand to 1.9 trillion yuan. In the short term, it can indeed temporarily solve the current problems in the United States. However, if the epidemic is not controlled, the Fed will continue to print money and a large amount of cash will circulate in the market. Coupled with the shortage of goods caused by the inability to resume work, one of the most direct problems caused by inflation, the financial crisis of 2008 may be repeated.
If the US dollar wants to solve the current dilemma, the only way is to achieve new breakthroughs in technology, use new technologies to attract investors’ attention and gain more Multiple sources of investment. This can understand why the United States has not yet developed 5G. There have been frequent news that the United States is now developing 6G technology because of 5G. China has already stole the limelight. If 6G fails again, the technical level of the United States will be questioned again.
In the era of globalization, if there are any problems with the US dollar, it will be difficult for other countries in the world to stand alone. Compared with the economic crisis of 2008, the situation is even more severe.
After the economic crisis broke out in 2008, China launched a major infrastructure boom, which brought a new dividend to the global economic development and provided it to countries around the world. A new opportunity for development has been created, and developing countries have also seized the dividend period and promoted their own economic development.
From the current situation, many countries have suspended production and production due to the epidemic, and the entire global supply chain has been severely impacted. If the global economic crisis re-emerges , For any country in the world, especially Western countries, it may face a new round of challenges.
worth one It is mentioned that China has the most complete industrial system in the world and the country with the broadest market. Imports and exports have been blocked due to the epidemic. China has changed its strategy, focusing on domestic circulation and forming a two-way linkage between domestic and foreign industrial chains. In other words, as the world’s first factory, the world cannot do without China, and even if China does not have an overseas market, it can form a complete supply chain of production, processing and consumption. This is why the United States is so afraid of China’s rise.