This is good for the US economy


The writer, chief global strategist at Morgan Stanley Investment Management, is the author of ‘The Ten Rules of Successful Nations’

Driven by the successful spread of America’s vaccines and maximum government incentives, the U.S. economy is projected to grow by up to 7 percent this year and is currently leading the global recovery. The commentary speaks of an “American Renaissance” in a nation that Sunday marked its 245th day of independence.

But there is a problem: America has only gone through an economic renaissance. He is not likely to be reborn again.

A decade ago, after the 2008 financial crisis, Standard & Poor’s lowered U.S. government debt for the first time, triggering terrible predictions of American decline. Instead, the year 2010 saw an expansion of American economic power, driven by its technological capability and its relatively rapid resolution of the debt crisis.

The U.S. share of global gross domestic product has gone from a low of 21 percent in 2011 to 25 percent last year. Average revenues started the decade 26 percent higher in the United States than in Europe in terms of the real dollar and ended more than 60 percent higher. The U.S. revenue over Japan has grown even more dramatically. At the beginning of 2020, despite the speech of “despairIn the middle class without work, the confidence of American consumers and small businesses has reached its highest level since the 1960s.

As a financial superpower, the United States has reached even greater heights. Its share of world stock markets increased in 2010 from 42 percent to 58 percent. U dollars emerged more dominant than ever, helping the United States extend its lead over other developed countries.

At the end of 2019, 75 percent of all foreign loans to individuals and corporations were denominated in dollars, up from 60 percent before the 2008 crisis. Six out of 10 countries used them. the dollar as its “anchor” – the currency against which to measure and stabilize the value of its own currency – close to a record high. China’s efforts to challenge the dollar as the world’s preferred reserve currency also completely failed during 2010

After a decade of return, America is unlikely to rise again in the 2020s. Like me sustinia at the onset of the pandemic, booms that are powerful are almost always followed by a long hangover.

The U.S. economy led the world in the 1960s, but in the 1970s it worried about falling behind the oil-fueled Soviet Union. In the 1980s he ventured onto an ascending Japan. The United States returned to the limelight during the technological boom of the 1990s, but the 2000s had everything to do with the growth of China-led emerging markets.


Forecasts for another U.S. source remain partly on the faith that it may want to expand its head in technology. But U.S. internet giants are already facing challenges in emerging markets from Asia to Africa, where local entrepreneurs are building national and regional market leaders in ecommerce, e-banking and research. Europe closes the innovation gap in fields such as robotics and AI, and European startups are attracting more money into private capital than ever before.

Booms are often killed by complacency, which plagues the United States now. Significant voices on both political parties have argued that America should continue to take and borrow freely, thanks to the unrivaled status of the dollar as the world’s most sought-after currency.

But easy money flowing from the Fed threatens to weaken the dollar and fuel the rise of zombies – companies that earn too little to even make interest payments on their debt. They barely existed in the United States 20 years ago, but they were 6 percent of the companies listed since 2010, and nearly 20 percent since last year.

The federal government and corporations are now so indebted in debt, it’s hard to imagine how they can further boost the economy. In 2010, the United States owed the rest of the world 2.5 tons of dollars, a sum equal to 17 percent of U.S. GDP. At the beginning of last year, those passive it had risen to $ 10 billion and more than 50 percent of GDP – a threshold that has often triggered currency crises in the past. They currently have $ 14 billion and 67 percent of GDP.

None of this means that American declinists, so wrong in the 2010s, will finally prove themselves successful. China’s growing share in the global economy has come largely to the detriment of Europe and Japan. Declines, still convinced that the United States will soon be overtaken by China, overlook the fact that China also has huge debt problems.

What is more likely is that the United States will have a mediocre decade, weighed down by the excesses of its recent boom. As for other markets, U.S. stocks are at a 100-year high. Ratings that reflect high the new optimism: after a dozen unexpected successes of the United States, many analysts now expect more of the same. Alas, this may be good for America.

This article has been amended to clarify the measure used for average incomes in the United States, Europe, and Japan.

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