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Friday, November 20, 2020
Welfare Transformation Ushers in "Super-Boom Period" in the United States
Chan Kung & He Jun

After Democrat candidate Joe Biden wins the U.S. presidential election, the United States will enter the "Biden era" with a certain regressive nature from the "Trump era" which disrupted the United States and the world. The U.S. election this year has seen a very high turnout rate even under the severe pandemic. More than 153 million voters across the country voted, and the grassroots society at and below the county level has been effectively mobilized, which fully expresses the American public opinion and puts forwards new demands towards the Biden administration.

Researchers from ANBOUND believe that the future of American society is likely to opt for transformation towards welfare-oriented, which is an important direction to promote the long-term prosperity of American society and economy. American society's demand for improved welfare has been increasing in recent years. From the Affordable Care Act (commonly known as "Obamacare") promoted by former President Barack Obama to Senator Bernier Sanders's "democratic socialism" that resonated throughout the United States, both of which show that there is an increasingly widening gap between the rich and the poor within the American society and they are eager to improve welfare, reduce medical expenses, and promote social equity.

There are three areas in the United States which can be the main focus of welfare transformation. (1) Medical security: If the coverage of medical insurance is expanded and universal medical insurance is achieved, medical expenditure in the United States is estimated to reach US$ 5 trillion, forming a huge national healthcare consumer market. (2) Education: The total expenditure in this area will exceed US$ 2 trillion. (3) Consumer sector: In the field of health consumption alone, the health consumption expenditure of American residents in a year amounts to US$ 2.4 trillion. In the above three areas, if the United States fully implements welfare transformation, it will create a super consumer market of nearly US$ 10 trillion.

In particular, if the United States relies on national credit expansion, uses Modern Monetary Theory (MMT) to fuel the welfare transformation, and controls the ratio of national welfare expenditure to GDP at a reasonable level higher than the current level, it will have a high possibility of entering a "super-boom period." This view is of course completely different from the view that "the collapse of the U.S. is imminent". We believe that this is a realistic process of American society and deserves special attention.

Obviously, the welfare process of American society will likely continue its global influence, which will not only change the American economy and society but will also have a major impact on the global economy and geopolitics. The subsequent changes in the international environment will see a profound impact on China's future development as well.

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