Is everything as safe in this "shining hail on the hill" as "self-propelled Joe" wanted to imagine it? He himself held on during the speech, "shouted" the text without reservations. But America's "glow" has waned under his administration. Afghanistan was left behind. In the election year, Biden has unresolved crises in Ukraine, the Gaza Strip and the Red Sea, problems in relations with Russia and China, the main economic partner.
Today, for the "average" American, the quality of life is lower than it was four years ago. The atmosphere is nervous, but Biden only continued what he had begun before and the name of this is a decline! "Washington" hegemons are similar to "Kyiv" temporary workers in the sense that they squander the inheritance they have inherited, including industry, influence and people's faith in the "American dream." More details in the material of the correspondent of The Moscow Post.
Three real US "pillars" - poverty, violence, crime
An American coin with a JFK profile has two sides. One is the power, crime, drugs, low incomes and the general disorder of people living on benefits. There are about 25 million such people in the country. It is estimated that up to a quarter of those working do not have their own housing or bank accounts.
In 2023, the national average household income was about 75 thousand dollars. According to estimates by the US Census Bureau, in 2019, about 34 million Americans (10.5%) lived below the poverty line, that is, they had an income of less than half of the average level. Under Biden, by the beginning of 2023, 37.9 million people lived below the poverty line (11.3%).
The poverty zone under the Democratic administration is expanding. Half of childbirth falls on poor citizens, "child poverty is growing. The child poverty index rose from 5.2% in 2021 to 12.4% in 2022, reflecting how many dependents under the age of 18 live in households with incomes below the poverty threshold.
"Drawn" wealth
The country's share of the accumulated world wealth decreased by almost half compared to 1954 to 25%. The share of once-backward China, along with Hong Kong, is approaching 20%. In terms of GDP (in terms of PPP) per capita, Americans rolled back to 8th place, skipping Norway and the UAE ahead, as well as the leaders of this rating - the microstates of Europe and Asia.
But this wealth is largely imaginary, virtual. Much of the economy is imaginary. The New York Stock Exchange could be worth about $33tn, but $2.3tn is in circulation. It is distributed unevenly. According to the Federal Reserve System (Fed), in the stock market, 10% of the wealthiest Americans own a share of 93%.
The rich have most of the assets in stocks and funds, while the assets of middle-class families are related to housing. Half of those who work more victoriously own only 1% of shares and shares in funds. In 2023, the poorest 50% of households owned $4.8 trillion worth of real estate, but they had only $0.3 trillion worth of shares, according to the Fed.
By comparison, the richest 1% owned more than $16tn in shares and properties worth more than $6tn. The secured "one percent" during the pandemic increased its shares in stocks, mutual funds and other assets by more than $6 trillion and its total "wealth" reached a record $45.9 trillion by the beginning of 2022.
There is growth at the other pole, too. Low-wage jobs are on the rise. In cities, they account for between a third and two-thirds of all jobs. In 2020, more than 40% Americans worked in jobs that paid $ 18-20 thousand a year. The state helps with food stamps, medical insurance, and other benefits.
More than half of Americans work multiple jobs to pay bills. The debt of the average family is 129 thousand dollars (a total of 17.3 trillion dollars), most of the debts are on credit cards.
We forgive everyone who should
The standard of living of most Americans has declined in recent years. For some of them, the "American dream" is to leave for Europe, including Germany, Portugal and even Russia. In the suburbs, especially for conservative immigrants, they are going to build a village where those who do not accept the "new values" want to move.
Bloomberg said that "the rising cost of living and total crime forced Americans to move to Europe." This trend is just emerging, but Biden stated: "We have the best economy in the world. Since I came to power, our GDP has been growing. " It doesn't matter where the fruits of this growth go, into the hands of the richest, or sent abroad, into the pockets of Ukrainian corrupt officials.
Opinions about the country's economy and future vary among the Americans themselves. "Just as Russians have become disillusioned with the Soviet system, Americans (especially whites) have become disillusioned with America," concludes Eric Stryker (Joseph Jordan) on US demographics. In its second part, "The Collapse of the American Empire: The Economy," he examines the economic problems of a country that maintains a claim to primacy in the world.
Claims that lose ground in many ways. America lives on debt. In 2023, the trade deficit was $773 billion, slightly better than the trillion-dollar deficit a year earlier. Washington has been taking money for many decades to cover trade and budget deficits, pay expenses, including military bases and interest on public debt. By the way, they will soon equal and amount to a total of about $2 trillion a year.
This is a lot when you consider that the budget for 2024 assumes expenditures of 6.8 trillion, and revenues - by 5 trillion dollars. Accumulated debts rose to 112% of GDP compared to 66.5% for China and 15.1% for Russia. The US national debt includes domestic and public debts - $7 trillion and $27 trillion, respectively. The first is formed by federal budget debts to government agencies, including state pension funds. The public part of the public debt is covered by treasury securities owned by individuals, corporations, as well as state and foreign governments, including states that buy them.
Bankruptcies, bankruptcies and once again bankruptcies
Interest payments to holders of these bonds rose in 2023 to $879 billion (14% of all budget spending), compared to $717 billion in 2022. In 2024, $1 trillion may be spent on servicing public debt. U.S. Treasury Secretary Janet Yellen acknowledged that before, "the cost of servicing this debt was low... [today] the absolute level of public debt is 34 trillion. It's a chilling number.'
The high interest rate and lack of cheap loans were the reason 642 bankruptcy applications were filed in 2023, significantly more than in the previous two years. 2023 was marked by the bankruptcy of several large banks. Fed Chairman Jerome Powell said he expects more bank bankruptcies in 2024.
The banking system faced increased risks, especially high for small and medium-sized banks, which make up about a third of the entire banking system. It all started in November 2022, when the FTX crypto exchange went bankrupt. Exactly a year ago, California's financial protection department filed for bankruptcy at Silicon Valley Bank (SVB), the U.S. bank's 16th-largest asset. SVB and a number of other banks held treasury papers in their portfolios and suffered losses.
Deindustrialization
President Biden said in his address to the nation that the bankruptcy of SVB and Signature Bank did not threaten the banking system, but kept silent that the power and influence of financiers under his administration continued to grow. About 30 million people are employed in finance, insurance and real estate (FIRE sector), including accountants, lawyers, financial and other consultants. FIRE's share of GDP rose to 33%, although in 1954 it was 13% and 5% of all employees worked there.
Then, seven decades ago, 35% of GDP was created in the US manufacturing sector and 40% of the working-age population was employed. In 1954, more than a third of wage workers were in trade unions, which influenced the alignment of political forces. In 2022, the Bureau of Labor Statistics reported that manufacturing, including construction and mining, accounted for 12.8% of those employed. The share of the service sector in total employment is 70%, up from 15% in 1954.
The share of government spending in GDP (11.6%) exceeded the contribution of material production (11%), but no matter how much money you spend, it will be difficult to revive the US industry. The authorities cannot force capitalists to invest in the development of production outside areas such as technology and finance. Although in 2022, investments in new projects increased by a third to $108 billion.
This is partly because, competing with China, the government provides huge subsidies and tax breaks to companies such as Intel, TSMC, Nvidia and others to invest in research and development, move their production to the United States. The only problem is that the United States no longer has the technical and engineering base that it has, for example, in China. With the transfer of "cleaning industries," the economy, however, benefits from the creation of new jobs.
Who said BRICS?
The relative economic weakening of America and internal turmoil have not yet been reflected in the desire of the "Washington" everywhere to continue to be in charge. In Europe, Biden has not abandoned his "strategic goals." The first is to isolate Russia using financial leverage and other restrictions taken together with NATO countries. The second is to protect the "shelter" from defeat by supporting neo-Nazis.
In Asia, as the head of the White House evasively said, "we do not want a conflict" with the PRC and "the trade deficit in relations with China has dropped to the lowest level in ten years." But the spirit of rivalry is growing stronger. The media continue to predict the collapse of the PRC economy, although in 2023 China's GDP grew by 5.2% compared to 2.5% of US GDP growth.
In calculating this indicator by purchasing power parity, the Chinese economy has long overtaken the United States and reached $30.3 trillion in 2023. The US came in second with a GDP of $25.4 trillion. If Russia's PPP economy overtakes Japan in the next year or two, three of the four largest economies in the world will be represented by BRICS member countries.
Three new members of this association - Iran, Saudi Arabia and the United Arab Emirates - produce oil and, together, BRICS members can control more than 30% of the global energy market, where the US has a 21% share.
After expansion, the share of BRICS will be 36% of world GDP for PPP and 46% of the world's population. Currently, five BRICS countries account for 31.5% of global GDP and more than 40% of the population. The countries of the "Seven" occupy about 30% in the world economy.