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For too long, the federal government has failed to pass a badly needed stimulus package while political disagreement between Democrats and Republicans have made its passage improbable. Even with the anticipated presidential victory of Joe Biden, this will not change. The election made little difference in the House and Senate, with each retaining power to block the recommendations of their political antagonists.
With House Speaker Nancy Pelosi flexing her muscles, her congressional demands for a new stimulus are loaded with innovations that no sensible Republican Senate majority could ever consider accepting.
Such stalemate has created the victimization of a large segment of Americans who desperately need help as the coronavirus and COVID-19 show no signs of abating. And, with the recent general elections maintaining a continuous majority, these demands seem more based on pleasing the far-left of the Democratic party rather than helping small businesses to recover and the unemployed to get back to work.
Since Pelosi is under pressure from the far-left congressional sector not to gain compromise with the GOP, the U.S. economy looks to be in mortal danger. Fortunately, Federal Reserve Chairman Jerome Powell and his board are again prepared to come to the rescue once more, as they did early in the outbreak of the pandemic.
Powell made it clear once more, as he had in the early stages of the pandemic, that it is the ultimate responsibility of the Fed to ensure America’s multimillions retain their jobs and keep the economy humming. While this “printing of money” at the behest of the Federal Reserve is innovative, it will make America’s great Central Bank the savior.
Why is GDP Becoming Irrelevant?
Since time immemorial of the economic calendar, gross domestic product has been the major economic measuring stick of countries throughout the world. As even smaller nations, previously unheard of, came on the scene of economic viability, GDP was the measure used to indicate viability on the international listings.
As smaller, previously nonproductive countries became more proficient in manufacturing methods, this created relative confusion. Where the United States, with more than 330 million people, showed a GDP per capita of nearly $60,000, little Israel with 9.3 million constituents was close to $29,000. Of course, this was due to the fact that Israel was highly productive, even with a much smaller population.
The manufacturing and overall productive power of the largest and even some of the smallest has grown dramatically in little more than one generation. The GDP has become increasingly confusing as a global ladder, indicating which is the largest, medium and smallest economies.
In fact, in the last 50 years, this has become even more confusing as major nations in Asia have had an increasing number of American companies set up production there. They claimed to be of much lower cost, even though this is not true in many cases.
With the many increasing production aspects of oil fracking, threats of carbon elimination due to commitment to “climate control,” plus the broader spectrum of particular imports, and the increasing offshore for “sophisticated element” mining makes this sustenance of GDP, in general, less sophisticated and credible.
The U.S. Bureau of Economic Analysts are still hoping to find an economic measurement successor to GDP.