Social Security Isn't 'Going Away'

 In 2015 Gallup conducted a poll and found that 66% of workers between the ages of 18-49 did not believe Social Security would be there when they retire. Social Security is a government-run program that is implemented to limit the market failure of information failure and income distribution. Information failure takes place because many people do not know how social security works/do not know they still need to save even though they will receive SS. Income distribution is needed because the retirees still need to receive some sort of compensation because they are not working anymore. 

SS works by replacing a percentage of your working income based on your lifetime earnings. The amount is more or less depending on your lifetime earnings and when you receive your benefits. If you wait until full retirement age, SS can replace up to 75% of your income for very low earners, 40% for medium earners, and about 27% for high earners. Every year you delay filing for your benefits, until age 70, this percentage gets larger. In SS you earn credits that qualify you to earn benefits when you retire. In 2021, you receive one credit for $1,470 up to a max of 4 credits annually. Although retirees receive compensation once they are retired and file for their benefits, SS was never supposed to be the only source of income for this demographic. 

“In 2021, $0.85 of every Social Security tax dollar you pay goes into a trust that pays monthly benefits to current retirees and their families, and to the surviving spouses and children of workers who have died. The remainder goes into a trust that pays benefits to people with disabilities and their families, and a small portion is used to cover the costs of managing the Social Security programs”. Recently The Treasury predicts the trust funds will be depleted by about 2023. The interest in these trust funds is not a major source of funding for these benefit payouts. Most of the benefits social security pays out are funded by taxes which are not expected to lower. When the benefits paid out exceed the taxes collected the SSA will cover the gap by dipping into the trust funds. Wallace states in the article that the government will need to make some sort of change in SS to adjust for benefits exceeding revenue. This is not uncharted waters for the government to alter SS, in 1983 Congress raised payroll taxes and cut benefits building up a larger fund reserve. I do not think it is very likely that social security will be gone by the time I retire or in the foreseeable future. SS is needed to help correct a market failure that would be apparent if it went away. Although a person is set to receive money when they retire they should start saving as soon as they can and put off filing for SS for as long as possible. By saving early and filing for SS later allows you to have the most money possible and makes the transition from working to retirement less stressful.

credit:

https://www.morningstar.com/articles/1060057/social-security-isnt-going-away

By Karen Wallace

Supply-Chain Crisis and the Effect it Could Have on the Economy

The supply chain is of the most crucial pieces of the economy, but even as we are experiencing a recovery after the pandemic, we are facing a new issue. Consumers are buying as much as ever before and this has pushed the supply chain to the breaking point. Mohammed El-Erian talks about a "stagflationary wind" that he says could blow the economy off course. He believes that economic growth rates are going to slow down quite a bit due to the fact that the global supply chain is struggling which will make it tough to keep up with demand.

We are seeing the issues that the UK is experiencing with the shortage of petroleum they have. They are currently struggling to find drivers to transport the oil to the stations. This comes as a result of Brexit and not allowing men and women from other countries in the European Union to work in the UK. Another country that is struggling with energy shortages is China. In the northern part of China, they are being forced to ration power and shut down manufacturing plants.  As one of the busiest times of the year approaches, Christmas, China is trying to solve this issue.

In addition to the UK and China, several other countries are struggling with the supply chain. Car companies are shutting down automotive plants in Germany until 2022. Japan is struggling to get energy and materials to the island for a reasonable price. The price per shipping container has increased nearly 300% and in some extreme classes 600%. 

The economy is going to have to work quickly to fix the current supply chain issues. There is a threat of another worldwide recession if we are not able to fix the expansive supply chain crisis. I personally do not know exactly how to correct some of these issues, but I am intrigued to see how and when they are fixed, and if it is in enough time.

Source: https://www.theguardian.com/business/2021/oct/02/supply-chain-world-economy-energy-labour-transport-covid

Biden v Big Meat: Can the US tackle rising beef prices?

Ever since the economy reopened after the pandemic, consumers have been seeing a dramatic increase in their grocery bills, especially on the prices of meat, with beef up 14% since December 2020, pork by 12.1%, and poultry 6.6%. From computer chips to processed meat, the cost of living in the United States has been rising without a doubt. Unlike many products with rising prices, the increase in meat price is not solely due to the supply chain issue. Instead, many suspects that the dominant power over prices of the few big meat processing companies has in the meat market is at the core of the problem. The four giants in the industry are JBS, Cargill Meat Solutions, Tyson Foods, and National Beef Packing Co, which accumulates between 55% and 85% of the market.

The huge market shares not only gave the meat titans power over the selling prices to retails and restaurants but also over the buying price for livestock from farmers. Due to the soaring demand for stockpiling meat during the pandemic, wholesale meat prices soared but livestock prices fell, which gave big meat processing companies record-high profits and margins. Both farmers and consumers are hurt while the meatpackers are the only ones collecting dollars from the pandemic.

Despite practicing a “laissez-faire” economic system, the U.S. government has a history of imposing policies to regulate the meat market. The Packers and Stockyards Act passed by President Woodrow Wilson and the price ceilings on beef, pork, and lamb imposed by President Richard Nixon in 1973 both aimed to monitor and control the big meat processors. Similarly, the Biden administration made an attempt to boost the competition with the big players by pledging $500 million in federal loans and grants to help small meat processing businesses to enter and stay in the meat market. In addition, the administration inquired into "price-fixing" in the chicken-processing industry already.

Of course, there are some resistances to the government regulations from the meat-processing industry. The major processors say the administration is "scapegoating" them and has misunderstood the "fundamentals" of the market. Besides, they claimed that the rising prices are not due to consolidation, but labor supply issues that led to the decreasing abilities of meat processing factories to operate at a full capacity.

Credit: https://www.bbc.com/news/business-58659478

Vaccine Mandate

United Airlines fired hundreds of employees who are reducing to comply with the character’s vaccine mandate. To be specific, UA fired up to 593 unvaccinated employees, who chose not to get vaccinated when the airline mandated vaccines for all employees. Airlines report that they want to make sure that the working environment is as safe as possible. Unfortunately, 7 employees are suing United Airlines for this decision. Moreover, 4,300 pilots of American Airlines are unvaccinated. Pilot unions are asking the White House for exemption for the president’s vaccine mandate. Across the country some essential workers are protesting the vaccine mandate. Some experts said that this mandate may lead to critical shortage in essential workers. It is very hard to get everyone vaccinated, due to right of choice, religious exemptions. On the other hand, people do not want to put themselves or their family in danger. Many people die, suffer, because of COVID-19. In order to stop this disease, I think that everyone should be vaccinated. If people are against it, then they should always wear masks. Moreover, they should be tested a couple of times per week. 

 

Yellen warns delay in raising debt limit will slow economy

     United States Treasury Secretary, Janet Yellen, is urging lawmakers to raise the U.S. government's borrowing limit. If the debt limit isn't raised by October 18th, Yellen warns that credit in the U.S. would be impaired and the country would likely face a financial crisis and economic recession. Failure to raise the debt ceiling would likely raise interest rates. The debt limit restricts the amount of money the government can borrow. It is raised to deal with government spending and taxing decisions which we have seen these actions being used during this COVID-19 pandemic. Yellen is warning congressional leaders to not make a decision on this issue in the last minute, as it could cause serious harm to businesses and consumer confidence, negatively impacting the credit rating for the U.S. for years to come. Government officials hope that Republicans and Democrats can come together to fix the debt ceiling, but Republicans argued that Democrats could use their majority to pass the bill. 

    Extending the debt is just another log that is stoking the fire between lawmakers and the Federal Reserve. Chairman Jerome Powell came under fire from some Republicans complaining about the high and growing prices for goods and services. Even some Democrats are in conflict with the Fed. Senator Elizabeth Warren stated that she will oppose a second term for Powell. She claims that Powell has made the U.S. banking system less safe which makes him a dangerous man to lead the Federal Reserve. It will be interesting to see how the relationship between congressional leaders and the Fed tie into the solutions in how to fix the U.S. economy. 

Source: Yellen warns delay in raising debt limit will slow economy - ABC News (go.com)

Panic Buying in U.K. Creates Shortages at Gas Stations

     U.K.’s departure from the European Union have impacted the U.K. in multiple ways. Recently, shortage of tanker drivers to transport the fuel tankers across the country has created panic among the consumers, and now the British government is looking for more tanker drivers to deliver the fuel to gas stations. As a result of panic, many gas stations closed after their supplies depleted and the government kept soldiers on standby to deliver the fuel. However, the government official stated that there’s plenty of fuel in the U.K., but it needs to be delivered to gas stations. U.K. is helping this situation by easing their visa restriction (temporarily) for truck drivers which will allow up to 5000 truck drivers from across the EU to drive the fuel tankers and help to solve the gas shortage issue. For the moment, the oil companies are asked to suspend competition and help the government identify the areas for fuel shortages so that they can focus on them and help resolve the issue. According to the Petrol Retailers Association, existing supplies are being given priority to highway gas stations to avoid tailbacks. The main reason because the U.K. left the EU which revoked the right of EU citizens to live and work in the country and it also implemented a strict immigration system which meant that lower-paid and lower-skilled workers had to meet a strict set of criteria to enter and work in the country. The government defended this by that this would force the local businesses to train local employees and pay them higher wages. Furthermore, the pandemic worsened this problem. Significant number of truck drivers changed their job because wage raises were nowhere to be seen. The government is also trying to reach out to drivers who have truck driving licenses and are currently not working, requesting them to return. It is possible for the government to train new truck drivers but not feasible because it takes 18 months to train a driver and the government requires drivers now to resolve the shortage. If the government is not successful to solve this shortage, gas stations that have supplies of fuel will charge a higher amount and they can make huge profits.

The Taliban are asking airlines to resume flights to Afghanistan

 As of Sunday, the Taliban requested that airlines resume travel to Afghanistan. The Kabul airport has been closed since the suicide bombing killing 13 American soldiers and resulting in damages to the airport. The Taliban have come to recognize that citizens of the country have became stranded in other countries since the shut down of international flights. This has also impacted other citizens in not being able to travel for business or studies.  Teams from Qatar and Turkey have aided in their efforts of reopening the airport for use again. The call for international flights to resume from the Taliban is aimed at the Taliban trying to gain legitimacy and recognition on the national stage. Some flights have already resumed but given the minimal amount of flights prices have double or tripled for flights. It will be interesting to see as this situation evolves, how it will continue to effect prices for flights. In addition what impact will this have on the Afghanistan economy as it looks the rebound since being taken over by the Taliban. It will also be interesting to see how the Taliban plan to regulate this and keep citizens from fleeing the country. 

A failed state

Household net worth rises above $141 trillion, but debt up sharply as well

 The Federal Reserve reported on September 23 that American households had a big jump in net worth, but it was accompanied by a big increase in debt and credit. “Thanks in good part to a big surge in stock market earnings, total household net worth rose to $141.7 trillion through the second quarter of 2021”, this is a little above 4% better than the previous quarter and about 19% better year to date. A big reason this can be attributed to is the massive increase in the stock market.  As I said previously debt also rose significantly “Household debt mirrored that of the federal government, which ended the quarter owing $28.5 trillion after a 9.6% increase”. It is good that households are seeing an increase in net worth, but at what cost? It is not good for our debt to rise simultaneously alongside net worth. Despite the positive of net worth increasing this past quarter, there is little evidence to suggest that this big increase in net worth will continue to occur. About 60% of the net worth increase is attributed to the rise in the stock market, the stock market performing as good as it has been cannot be the sole evidence to support a constant increase in net worth because of how inconsistent stocks can be.

source:

https://www.cnbc.com/2021/09/23/household-net-worth-rises-above-141-trillion-but-debt-up-sharply-as-well.html

Should the U.S. economy stop their emergency funds now?

With COVID -19 wave's erupting, the U.S. economy has become a victim of inflation, high unemployment rates, and low economic growth. However, as we come close to the end of the second year of COVID-19 there is a sense of optimism in the government. According to the Forbes article, the Central Bank has reported that job marketing is slowly improving. Due to this, they will now stop their emergency funds to the economy. A date has not been set for when the funds will stop. In August, fewer jobs were put up as the Delta variant was spreading. Current inflation rates are also at 5.3% which is the highest it has been in 13 years! Currently, the fed's have two goals  for the economy: 

1) Keep the U.S. inflation at 2% 

2) Reach maximum employment - which means everyone who needs a job has one. 

During the pandemic, the government supported the economy by slashing interest rates to historic lows and pumping billions of dollars into the financial system by buying government and corporate bonds. After the emergency funds will stop the interest rates will go back up. 

With COVID-19 still being a sensitive issue will this help the economy start functioning on its own again or will this hurt the economy even more? If the government doesn't pull out now then is there a better time? 

https://www.bbc.com/news/business-58659476

Japan approaching end of COVID-19 emergency in most areas - health minister

     Japan has been seen as one of the best countries in terms of both economy and one of the best places to visit in the world, but due to Japan being located in East Asia, right next to China, it has had its fair share of Covid-19 cases. 

    Despite Japan being one of the most developed countries in the world, they struggled severely with cases due to several socio-political problems. The first being that Japan has the biggest metropolitan area in the world and it doesn't help that it is also very densely populated so the Covid-19 cases can spread very easily and quickly. Japan also has a very young population, combine this with having lots of night life in the worlds biggest metro area and this is a recipe for disaster. The final and most significant reason for the Covid-19 Cases being so rampant is the lack of Covid-19 Vaccines, and the Japanese people not wanting to get vaccinated as they do not trust the Western medicine and they don't have access to it.

Due to the severity of the Covid-19 cases, the Japanese government implemented a strict travel ban and several state of emergencies. No foreigners were allowed entrance or allowed to leave the country, only Japanese citizens could come back and you needed government documentation. The Covid-19 state of emergencies were pretty simple as well,  you had to wear masks, and businesses had to close and were compensated by the government. When cases declined there was more of a soft lock and you could do more things and go places, the state of emergencies were national at first but then only applied to certain prefectures with the most cases. 

Since the state of emergencies, Covid-19 cases have declined, more than half the population of Japan is vaccinated, 80% of all Covid-19 cases are from people who did not take the vaccine. Due the drop in Covid-19 cases, the government is thinking of lifting the state of emergencies placed in certain prefectures, but this isn't without concern. The government does agree that if they do see a more sudden rise in cases, it could overwhelm the healthcare system and put it into a crisis; but as of now it seems things are once again  getting back to normal and Japan is getting ready to open its borders.

SOURCES:

https://www.reuters.com/world/asia-pacific/japan-approaching-end-covid-19-emergency-most-areas-health-minister-2021-09-24/

https://apnews.com/article/pandemics-tokyo-coronavirus-pandemic-asia-japan-8049258656473799e491604fefe44e79

https://apnews.com/article/business-health-japan-coronavirus-pandemic-4b409cf1a663759d6a434fe1faf0cc2d

Should Digital Currencies be regulated?

 Bitcoin emerged a decade ago as a viable alternative to money, and has since then (especially recently) gained major traction. However, the the world's 2 biggest economies are not too happy with it. And while both the US and China have begun to implement regulations of cryptocurrencies, they are also in the process of developing their own digital currencies centrally as well.

Cryptocurrencies are traded online, away from the control of governments, central banks and institutions of the global financial system. For this reason, China has banned all use of it, claiming that it used by criminals. The US also claims that it is important that the Fed is able to deliver a stable and trustworthy currency to its people, and bitcoin acts as a barrier in that. They also claim that while innovation is very important, where the public is concerned the government has to step in and enforce some sort of regulation.

However, some countries are embracing the cryptocurrency. El Salvador declared Bitcoin as a legal currency, and Ukraine followed suit. Cuba, Malta, Singapore and Switzerland are all also becoming more open to the idea of a virtual currency, and trying to create a business environment where crypto is able to grow.

U.S. Debt Ceiling - Does it matter?

Recently, congress has been facing a deadline to raise the debt ceiling in order to prevent a default on the national debt. Congress has until mid-October, to reach a deal to raise the debt ceiling (or federal borrowing limit) before the government runs out of money to pay its bills. 

But what does the debt ceiling do? Does it even matter?

The debt ceiling was introduced during the 20th century wars before Congress had to approve each specific borrowing instance. The ceiling was needed to accrue more overall debt. Since its introduction, the debt ceiling has been raised 98 times due to the U.S. routine of spending more money than it raises in revenue. When the U.S. spends more than it raises in revenue, a deficit is created. To cover these deficits, the Treasury Department issues government securities. These securities are similar to a loan, as investors give the government money with the promise of getting their money back with added interest. This security loan is then added to the national debt. The debt ceiling therefore is the Congress passed limit that the U.S. can borrow. Raising the debt ceiling doesn’t mean that spending will increase, instead it hints that the Treasury can issue more securities to cover spending that Congress has previously authorized. Once the ceiling is ready again, no more debt can be issued until lawmakers vote to raise the ceiling. The Treasury does have cash reserves to pay the governments bills, but those will be inadequate and eventually run out. 

If the ceiling is not passed and the government runs out of cash, it will therefore miss payments on its bills. These bills include monthly Social Security and veterans benefits, or paychecks to federal employees and members of the military. As estimated by Goldman Sachs, the U.S. Treasury would need to halt more than 40% of payments if the ceiling is not raised. Those halted payments would include ones to U.S. households. If the ceiling is not raised, additional disruptions would affect individuals and businesses who’s loan rates are tied to the yields of Treasury securities. 

Therefore, the ceiling is very important. 

If Congress doesn’t vote to raise the ceiling, major economic impacts will follow. Treasury Secretary Janet Yellen has said the government will run out of money mid-October without a ceiling raise. This would crush financial markets and raise borrowing cost. Article Link

Do We Need to Shrink the Economy to Stop Climate Change?

    There is a debate going on in the economic and political world on how to solve climate change. One side believes that the global economy can both continue growing and reduce the threat of climate change through rapid, market led environmental action and technological innovation. However, another side argues that humanity simply does not have the capacity to phase out fossil fuels and meet the ever-growing demand of economic growth. Therefore, consumption has to be limited.

    For the case of degrowth, economic anthropologist, Jason Hickel, defines the argument "a planned reduction of energy and resource use designed to bring the economy back into balance with the living world in a way that reduces inequality and improves human well-being." Hickel's view is to reduce resource and energy consumption, which will make it easier to rapidly transition to renewable energy. This economy would be one that could improve people's livelihoods despite a reduction in activity. Degrowth seeks to scale down ecologically destructive and less necessary production like S.U.V.s and beef while expanding more important sectors like health care and education. Also, the economy would enact policies like shortening the workweek and shifting workers out of declining industries.

    Critics of degrowth wonder whether it offers the correct prescription of reaching carbon neutrality on a shorter timetable. It is important for the degrowth movement to not portray to rich countries that the climate movement can only be achievable if they stop eating meat or driving nice cars because the movement will collapse. New York magazine's Eric Levitz agrees that nothing short of a dictatorship could affect this massive transformation. Even though degrowth has no mass appeal, it allows us to wonder if G.D.P growth is the best indicator of human progress.

    If this issue is either all or nothing for the politicians or the economists, "doughnut economics" could be an alternative. This view says that 21st century economies should abandon growth and make it their to reach the sweet spot- or the doughnut- between the "social foundation," where everyone has what they need to have a good life. Amsterdam's city government imposed this type of economy during the first wave of the pandemic last year to prioritize its residents' welfare and happiness over G.D.P. growth. Even though the U.S. has never embraced any type of degrowth policy, policies like universal basic services and shorter working hours could help solve the problem of America's addiction to fossil fuels.

Article link- Do We Need to Shrink the Economy to Stop Climate Change?: Spencer Bokat-Lindell - New York Times - ProQuest

The Taliban and Russia

The Taliban requested Russia to help stop drug trafficking in Afghanistan. The Kremlin has now said that it would further monitor the group’s activities and wait for the structure of the Afghan government to be finalized. The Russian foreign ministry and the Taliban are now negotiating whether a delegation from Kabul can visit Moscow for further discussions. The Taliban spokesperson in an interview, had said in order for the Taliban to put an end to Afghanistan’s drug trafficking problem the regime would require assistance from other countries, particularly Russia. The Kremlin spokesperson responded that “We are closely monitoring what the Taliban are doing in Afghanistan, what the final structure of the government will be like and how promises will be implemented. We are watching it all together. Russia, China, and Pakistan actively engage with the Taliban regime. However, none of these countries have officially recognized the Taliban. Taliban heavily depend on drug traffic. Can this request just be a trick in order to pretend that the Taliban are willing to stop its drug business?

Israel's new defense minister meets with Palestinian Authority President

The new Israel government's Defense Minister Benny Gantz, met with the Palestinian Authority President Mahmoud Abbas today, marking the first high level meet between the two governments in seven years. This meeting shines a new light on the relations between the two governments and may point towards peace, though both do not aim to come to peace just yet.

Both sides are getting backlash from respective critics. Islamists oppose Mr. Abbas while the diverse coalition opposes Mr. Gantz. The Palestinian side fears whether statehood can be achieved or not. The Israeli side fears whether there'd be another rebellion. It is to be seen whether further meetings would be held, and what actions would be taken by the parties.

The Israeli government has already promised reparations and approvals to many Palestinians' demands and projects, which the other political parties of Israel do not fully support. It is yet to be seen what Palestine's actions would be, but their current position is to cease all violent activities against Israeli personnel.

The situation between the two parties remains tense and it would not be surprising if another war started, but these meetings are a step in the right direction, a direction towards peace.

Article Link: https://www.nytimes.com/2021/09/25/world/middleeast/israel-palestinians-abbas-bennett.html

German elections: Businesses face future without Merkel

 German elections: Businesses face future without Merkel

In Germany, Angela Merkel has been the chancellor for the past 15 years. However, with the new elections coming up Merkel is stepping down and will not be eligible to become chancellor again. This change in leadership leaves many people, and business, wondering what life will be like next. The coronavirus caused many businesses, especially those in entertainment, to suffer. While other businesses are able to start getting back on their feet, many entertainment businesses are struggling to comply with Covid regulations. Who ever takes over Merkel's leadership will have to figure out a way to help the businesses that are still struggling in a coronavirus world. 

Like many other places, Germany is facing a worker shortage. With limits on travel and migration, businesses that relied on immigrant workers are finding it hard to staff their workplaces. Again, businesses are looking forward to a new chancellor to come up with new solutions to this problem. Another thing Germans are looking forward to with a new chancellor is the update of German technology. Europe is currently not a tech powerhouse compared to the United States and China, and Germans would like to see Germany leading the tech movement. 

It will be interesting to see who the German people elect, and how their policy will differ from Merkel's. I hope that rise of the right does not continue with the German people as it has in other European countries. 

https://www.bbc.com/news/58632324 

U.S. to donate millions more Pfizer-BioNTech vaccine doses to poorer nations

 The article focuses on how approximately 500 million doses of Covid-19 vaccine will be donated to primarily lower-income countries by the U.S. government. The article states how this represents an expansion of the companies' agreement with the government to provide these doses of vaccine for the price for a not-for-profit. This donation will bring the total number of doses to be supplied to these countries to 1 billion. In the agreement it says that 92 low and lower-middle-income countries and 55 member states of the African Union. They expect that the 1 billion doses will be distributed by the end of September as the process did begin in the beginning of August. The article further discusses vaccination rates within the U.S. and U.K. and EU compared to the rest of the world. These donations are the first steps to aiding the rest of the world to get vaccinated so we can get past this pandemic.

https://www.cnbc.com/2021/09/22/us-to-donate-millions-more-pfizer-biontech-vaccine-doses-to-poorer-nations.html

China cracking down on cryptocurrencies

Today, China has reaffirmed its position to outlaw all cryptocurrencies in its economy clamping down on all related economic activity. This includes cryptocurrency miners and platforms based in China that have taken advantage of the cheap manufacturing of computer hardware and software. This decision has been made in large part due to the environmental ramifications that cryptocurrency creates. For mining in particular, it is very energy intensive to not only power the computer equipment but to also run systems critical to the cooling necessary for these computers to run nonstop. The heavy reliance on cheap electricity causes a high demand for sources that produce a lot of pollution like natural gas and coal power plants. The growth of this industry in China runs in the opposite direction of the country’s goals to fix its international reputation as the world’s largest polluter. China has set a handful of monumental goals to reduce its pollution levels and cryptocurrency could be a factor in achieving those milestones.

While today’s statement from China echoes previous messages reflecting their unflinching position, it does not change how impactful this decision will be on the future of cryptocurrency worldwide. China has a huge market that can help fuel the growth of cryptocurrencies and further legitimize the new technology. Without this market, growth will be slowed as other regions in the world develop their own cryptocurrency sectors. However, the absence of a major player in the market can open up many opportunities for others to capitalize on. Miners and platforms in other parts of the world can take more market share with less competition. Also, governments can take the lead over China to make themselves economic leaders in this budding market.

Overall, China is taking a more different approach to cryptocurrency than most of the world. But time will tell if China’s aggressive market involvement will pay off.

Credit

https://www.cnn.com/2021/09/24/investing/china-cryptocurrency-ban/index.html 

Boris Johnson's UN speech

 At the start of November the United Nations Framework Convention on Climate Change (UNFCCC) will meet in Glasgow Scotland to discuss the climate crisis. It was originally scheduled for a year ago but was postponed due to Covid-19. This will be a pivotal moment for the future of our species, if we can not come together as a global community to fight climate change I fear that the earth's environmental health will change drastically in the next millennium and will no longer be hospitable for the life it currently supports. In a speech recently to the UN general assembly, Boris Johnson took what was to me a shocking stance. Historically Boris Johnson has not made climate control a high priority, but in his speech he takes a totally different stance. He compared the human species to other mammalian species and how long we have been on earth. For as long as mammals have been on earth the average species lasts about a million years before it goes extinct or evolves into something else. Modern humans have only been around for 200,000 years making us only 16 years old as a species, the age when you've learned just enough to get yourself into serious trouble. Boris said that our species as a whole needs to "grow up" and face the damages we have caused over the past century, and that we cannot keep acting like "adolescents" who never face real consequence. While hearing this from a prominent conservative is a good sign for the earth it is extremely frustrating that it has taken this long for him to recognize reality. I believe he and other politicians are well aware of the climate effects they are causing and have been for a long time, but refuse to publicly acknowledge it for political purposes. It seems now public opinion has swayed for enough that being green is now the more politically savvy move. This is good news for the earth but shows the glaring faults in our nations leaders.

Link to speech:

https://www.youtube.com/watch?v=gpze1aEJygA

Nike’s Revenue Pinched by Supply-Chain Disruptions

Supply chain issues have been in full effect ever since the covid-19 pandemic has spread across the globe. Footwear imports have been one of the goods majorly affected by the supply chain disturbance. Even Nike, the biggest sportswear brand in the world, has said production problems in Asia and Trans-Pacific shipping delays will weigh on sales. Of all the Nike factories around the world, the United States factories make up 6.4% of them worldwide.

Nike’s revenues have increased greatly since the start of the covid-19 pandemic, but it seems that the supply-chain issues have caught up with them. Nike reported on Thursday the revenue was $12.25 billion before the quarter ended on August 31st. This is up 16% from last year this time but has stayed flat since June 2021. These numbers were below that of what the Wall Street analysts had predicted of $12.47 billion. Executives of Nike express that their demand for their product stays high and the only reason that they are not reaching these predictions is because of the supply network issues. 

Matthew Friend, Nike’s finance chief said that Nike lost 10 weeks’ worth of production in Vietnam due to the lockdowns after the surge of covid-19 cases. Another problem is in the transportation of goods. It’s taking an average of 80 days to get products from Asia to North America; this is twice the amount of time compared to that of pre-covid times. Most of Nike’s footwear production is in Vietnam where they now have been placed on lockdown until at least October 1st, this could continue to cause flat revenue growth for the highly demanded company. 

To try and relieve supply-chain issues Nike and other shoe and apparel companies have sent a letter to President Biden requesting him to speed up Covid-19 vaccination donations to Vietnam. The United States has delivered six million vaccine doses to Vietnam since July. Nike has also been trying to shift some production out of Vietnam and using air freight to avoid congestion at ocean ports to get ready for holiday months.

Although supply-chain issues are in full force, it does not seem to be stopping the biggest sportswear brand in the world whose net income numbers from August 2021 are up 23% from the previous August. The net income numbers may have been higher had there have been no issues in the supply network. This will not be a major issue for Nike though due to such high demand for their product. 

https://www.wsj.com/articles/nikes-revenue-pinched-by-supply-chain-disruptions-11632434721?mod=hp_lista_pos3

The Evergrande Debt Crisis

Evergrande is a Real Estate company that was founded in 1996 and took off during China's housing boom. They are China's second-largest Real Estate company, but they are now in debt of over $305 Billion. This is raising major concerns in both China and the global economy. Global markets have been selling off as a result of the "company warning its invest it could default on its debts." I would argue that the major concern is in China though due to the fact that Evergrande has $1.4 million of prepaid homes by the homeowners themselves that have yet to begin development. According to the article, Evergrande has over 200,000 direct employees and is indirectly responsible for another 3.8 million. There has been some discussion whether the Chinese government should step in and help the company due to the number of people that this Evergrande has an impact on. 

It is thought that the main reason that this powerhouse of a company is on the verge of bankruptcy is due to China's increase in its regulation. The government has been working to control the price of houses to make them more affordable to live in. With labor and resources remaining constant, this leads to the loss of returns that Evergrande can make off of their real estate properties. There is a lot of fear in the banks right now due to "128 banking institutions and 121 non-banking institutions" being exposed to Evergrande.

This situation should unfold rapidly as many are predicting that the Chinese government will have to make its decision in the coming days. It will be interesting to see what the Chinese government decides to do and how it impacts the market.

Source: https://www.weforum.org/agenda/2021/09/evergrande-debt-crisis-global-economy/ 

French government recalls its ambassadors from Australia and US

 Two long-time allies of France have stabbed them in the back, those are the words of the foreign minister of French. France for the first time ever has recalled its ambassadors from the US and Australia for consultations. This decision was caused by the announcement made on September 15th by the United States and Australia. Austalia canceled the Attack class submarine program binding Australia and France since 2016. They announced a new deal between the US and Australia to start studies on possible future cooperation on nuclear submarines. According to the French government, it is unacceptable behavior between partners and allies. The reason behind this showdown is the trilateral security partnership known as ORCAS. Its goal is the partnership of the US, Australia, and the UK in the intelligence, defense, and technology industries. One of the goals of this partnership, it to equip Austalia with nuclear-powered submarines. This partnership can lead to unpredictable circumstances in the world arena diplomacy.

Boeing says air travel to return to pre-pandemic levels by 2024

As an industry that is worth 3.6% of the global economy and supported 65.5 million jobs worldwide, the aviation industry is an incredibly important part of the global economy. And it has been and will be for a while, going through dramatic changes.

According to the airline body IATA, passenger numbers fell 60% and the industry lost around $126 billion last year during the pandemic. However, this situation was subject to change. “The industry recovers to 2019 levels of traffic by the end of 2023, early 2024” says Darren Hulst, the vice president of commercial marketing at Boeing. The US aircraft maker claimed that 43,610 new commercial aircraft will be needed by 2040, which has a combined value of $7.2 trillion.

There are some obstacles on the way to recovery. Due to factors such as travel restrictions imposed by the governments and intense political tensions, long-haul international routes would take more time to recover. Moreover, the lack of a coordinated global approach has made international travel, even state travel difficult. In other words, having a common set of travel rules is a key component to full recovery. Although some efforts have been made in Europe by introducing the vaccine passport, the majority of the other countries and regions in the world still impose different quarantine requirements and have their own approach to monitor the vaccination status and.

Other than changes made subject to the pandemic, the aviation industry is changing geographically as well. China is predicted to replace the United States as the world's biggest aviation market along with the rise of China and the Middle East. In addition, the aviation industry is becoming more sustainable. Though slowly, there have been efforts made towards reducing fuel usage and carbon dioxide of air travel in response to the crisis of climate change. The International Council on Clean Transportation (ICCT) predicts that at most, 5.5% of aviation fuel in the EU could come from sustainable sources by 2030.

Credit: https://www.bbc.com/news/business-58560821

A different perspective to the current situation in Afghanistan

 

As the US troops have withdrawn from the Afghan land, the Taliban have taken over. The general understanding of people is that the same system which was followed 20 years ago by the Taliban will be implemented again. Their rule 20 years ago was very harsh and included brutal tactics. Women were not allowed to go to school or appear in public so easily. Men were beaten up publicly for what they thought was an un-Islamic act. Men were forced to not cut their beards and pray five times a day. Public executions were also very common. This time when the Taliban came to power again, they did announce certain things that weren’t expected of them. For example, they announced that no one will be harmed, and everyone is forgiven. They acted more like they wanted the country to run progressively. They also announced that women can attend school, colleges, and higher education in segregated settings. They did not stop women from working jobs. They also announced breaking ties with Al-Qaida. Now, how much truth lies in them, is only what time can prove. But considering the fact they have made decisions that are not expected from them and are trying to be progressive is commendable. Recently, the Taliban said they want their university graduates to compete with the world. These announcements are rather shocking because nothing like this has been announced in their rule before. They are still strict about a lot of things and are enforcing the Islamic law, but all do all these progressive announcements mean that they are changed this time? Is Afghanistan really going to come up and compete with the rest of the world? Will they actually be able to develop their economy so strongly? Only time can tell.
https://www.aljazeera.com/news/2021/9/12/taliban-say-women-can-study-in-gender-segregated-universities

https://www.npr.org/2021/08/16/1028053171/will-taliban-rule-be-any-different-this-time

El Salvador's Presidency and Switch to Cryptocurrency

     El Salvador has made headlines in the past week for two things, the decision made by the country's supreme court to allow presidents to run for a second consecutive term, and the addition of bitcoin as its currency/legal tender. The country is known for its unstable government and high homicide rates since its civil war and many citizens have been looking for a solution. President Nayib Bukele has become extremely popular since he has come into office in 2019 for lowering crime rates across the country, building new infrastructure, and providing food stamps. But his astronomical rise to power has not been without questionable political moves in the face of democracy. After gaining a super-majority in the legislature in february, five supreme court judges were replaced with some of his sympathizers to help allow him to change the constitution to have the ability to run for a second consecutive term, which he is now looking to do in 2024. The question then becomes, what will happen now, when Mr. Bukele has the judiciary system on his side? The current situation looks like it is transitioning to an authoritarian rule, something that El Salvador has been struggling to avoid.

     The switch to bitcoin as legal tender has also caused many questions on how the country will change. Having a source of national currency as volatile as bitcoin has raised many eyebrows and has the world looking at El Salvador. When goods and services are tied down to a volatile currency, the biggest question becomes, how will this effect the market? The reason for the addition of bitcoin is due to almost 20% of El Salvador's GDP coming from overseas, where transaction costs are expensive. To counteract this, switching to bitcoin would lower these fees and allow the transferring of money to become much easier. But many citizens in the country are worried, as almost half of the people do not have internet access, and are suffering from problems internally. Is the switch to bitcoin a good decision? Is the switch untimely or ignoring other issues within the country? So many questions arise from both an economic and political standpoint when it comes to El Salvador.

 

Sources:

https://www.economist.com/the-americas/2021/09/11/el-salvadors-bitcoin-bro-president-is-beloved-and-dangerous

https://www.reuters.com/business/finance/el-salvador-leads-world-into-cryptocurrency-bitcoin-legal-tender-2021-09-07/

https://www.newscientist.com/article/2289763-why-has-el-salvador-officially-adopted-bitcoin-as-its-currency/

 The new outbreak of the Covid-19. Do vaccines work?

The world has suffered from Covid-19 infection. People have lost members of the family, jobs,

freedom. I remember everyone took it as a joke. Our university had a spring break at the beginning of

March 2020. This break started a new chapter in students’ lives. I was watching the news, New York

started to shut down their university due to pandemics. No one did not think that this pandemic will kill

an enormous amount of people, turn people's lives into chaos. Starting in 2021 people started to get

vaccines. It seemed to be the end of the pandemic. The president of the United States announced that

people don’t have to wear masks anymore. So what happened? Why do we have to wear them

again?

Since the new outbreak of the Delta variant of the Covid, people have to keep social distance and wear

masks. So why did we get vaccinated? The data shows that the average number of new Covid cases in June was

around 15,000 cases, but it increased dramatically up to 150,000 in late August. According to CDC,

vaccines are highly effective. Unvaccinated people were 11 times more likely to die of covid-19, CDC

report finds. However, it is hard to make people get vaccinated due to the rights of the people or religious

beliefs. The president recently announced that workers companies with 100 or more employees

should be vaccinated or show negative test results each week. In my opinion, every person should be

responsible for society. Either get vaccinated or wear masks every time they are outdoors.

Issues in the shipping world

 

   Of the many things that were messed up during COVID-19 the shipping industry was no exception. Prices have risen almost 4 times from a year ago. The article also mentions how firms are getting desperate and may start sending out faulty ships to try and keep up with demand. I wonder if we could see a backfire of this and having some sort of ship failure causing environmental or damage to the crew members? 

Its also interesting to note how the industry was in a very good place until the pandemic happened. After that the number of idle ships went up by 11% then when the stimulus hit the demand went up 27% causing massive delays and prices soaring. Along with all of this important ports in China were closed causing even more confusion in the industry. The article also mentions how it will take maybe over a year for the backlog to be fixed. 

What I wonder is that with the delays and all the issues will we see any firms innovate and attempt to come up with new ways to ship goods? I wonder if we will ever see drones sly goods across the ocean and if it will ever be viable price wise. Just something interesting to ponder. 

Source: https://www.economist.com/finance-and-economics/2021/09/12/a-perfect-storm-for-container-shipping

Greece's Economy Expected to grow by 5.9% in 2021 says the prime minister

Saturday Greece's prime minister Kyriakos Mitsotakis said he expects Greece's economy to grow by 5.9% in 2021. This is surprising considering the prime minister previously came out and had predicted growth of only 3.6%. As mentioned in the article this expected growth can be attributed to 70,000 more jobs, 46,000 more businesses, and bank savings increasing by 35 billion euros. Given the expected increase the prime minister announced a tax reduction as well as spending targeted at young people. Tax breaks for small businesses encourage them to merge as well as new entrants in the job market will be subsidized. Something I found super interesting is the government is going to incentivize getting the vaccine to 15 to 17 year olds by giving them 50 gigabytes of data for their smartphones. Another announcement by the prime minister was to lower the corporate tax rate from 24% to 22% for small businesses. The prime minister stated his goal was to "increase households' disposable income," as well as strengthing entrepreneurship in the hopes of creating new jobs. The new package sets out to boost liquidity, business growth, as well as promotion of green and digital investments. Surprisingly enough it was also reported that despite the series of strict lockdowns for Covid, Greece's quartile GDP is now back to running above pre-pandemic levels. The prime minister also mentioned a plan to combat a rise in prices. The prime minister plans offset the prices in food and power costs. In doing so the prime minister has announced tax reductions of sales taxes on coffee, transport, non-alcoholic beverages, cinemas, gyms, dance schools, and tourism packages until June 2022. 

Sources: 

https://www.usnews.com/news/business/articles/2021-09-11/greeces-economy-to-grow-59-in-2021-prime-minister-says

https://www.bloomberg.com/news/articles/2021-09-11/greece-forecasts-fastest-gdp-growth-in-2-decades-plans-tax-cuts 

Higher Wages, Higher Inflation

     Due to the earlier waves of Covid, production of non-medical goods saw a decline, and now that regular production has been picking up, the market is lagging behind. Due to the decrease production of important inputs such as raw materials and intricate parts, we are seeing input shortages that have made it difficult for American manufacturing companies to pick up where they left off. Along with the this, many people have refused to go back to work following the pandemic, which has caused a worker shortage all over the country. In fact, the Labor Department has reported 10.9 million open job positions in July, which is hard to believe considering the 5.2% unemployment rate that has been reported by the Fed. To aid with this problem, firms have been seen increasing their wage, subsequently increasing their prices. With the shortages in inputs and shortages in labor, we are seeing a two pronged attack on the price of goods and services. Due to the market being in disequilibria, we will certainly see improvement in the future, however. Due to the decentralization of the market system, the market will soon catch back up with production of inputs. To solve the problem of worker shortages, we will likely see innovation in capital that will replace workers with machines and computer programs in order to lower the currently inflated price of goods. 

Source: https://www.cnbc.com/2021/09/08/businesses-are-feeling-stronger-inflation-and-paying-higher-wages-feds-beige-book-says.html

Biden's vaccine mandate could be a shot in the arm for U.S. economy, experts say

    President Joe Biden announced a nationwide vaccine mandate which requires all employers with 100  or more employees to make sure their workforces are fully vaccinated or show a negative COVID test at least once a week. The government hopes that this mandate will not only protect lives, but the economy as well. Economists have attributed the U.S. economy's slower than expected growth to the highly contagious Delta variant. Until the virus can be contained, states with low vaccination rates will continue slower job growth than states where more of the population is vaccinated. 

    The mandate will affect about 100 million Americans, many of those already vaccinated. According to research from the Associated Press, about half of Americans are in favor of vaccine mandates for employees working in person at their workplace. This comes after the nation only added 235,000 jobs in August, which did not meet economists expectation of 750,000 new jobs. Employers looking for workers may see these numbers and take a page of the mandate to grow their businesses faster.

    However, there are questions to be answered from this new mandate. It is unsure how the vaccine mandate will be unforced and fines to companies who do not comply could be as expensive as $14,000, according to Biden. Also, this mandate could have an adverse reaction from employees, who may just quit rather than abide by the vaccine requirements, further slowing job growth. The largest question still to answer is the virus. Chief economist at Pantheon Macroeconomics, Ian Shepherdson, noted that Delta cases could peak as soon as this month. Therefore, the dip in cases could spur consumer confidence and grow the economy. Still, there is uncertainty about a possible winter surge in the future. So, it will be interesting to see how much dent the vaccine mandate will make in the ongoing pandemic.

Article link: Biden's vaccine mandate could be a shot in the arm for U.S. economy, experts say - CBS News

U.S Hiring Slowed Sharply in August.

 

According to the Labor Department, the U.S. economy added 235,000 jobs in August even though economists had estimated that there would be 720,000 new jobs. The unemployment rate fell from 5.4% to 5.2%, a decrease of 0.2% from July, and the wages increased 0.6% from the last month. The reason why less jobs were added was due to weak hiring in service sector. According to an economist at the Economic Outlook Group, consumers are cautious about spending. This is known to many businesses which is causing them to pull back on hiring. About 5% of events that were scheduled for the coming months have been cancelled and some have been switched to online. As the events are cancelled, businesses don’t have the need for many workers which has resulted in the hiring process slowing down. The pace of job growth is dependent on the direction of Covid-19 as it has already caused uncertainty and that’s why many employers are holding their hiring process. It is also expected that children going back to school will lure parents in the labor force as child-care responsibilities ease, especially for women. Employment at daycare fell during the pandemic because parents were working at home and so were able to look after their children themselves.

 

As Covid-19 cases rise due to the Delta variant, the job market will be impacted. However, the unemployment rate has declined significantly from July 2020 (10.2%) to August 2021 (5.2%) a decrease of 5%. This decrease is attributed to the availability of the vaccine as it has aided the economy into becoming stable again. If we are able to control the Covid-19 pandemic, the unemployment rate will decrease further and the economy might experience a boost again.  

 

 

Cambon, S. C., & Morath, E. (2021, September 3). U.S. hiring Slowed sharply in August. The Wall Street Journal. https://www.wsj.com/articles/august-jobs-report-unemployment-rate-2021-11630624394.

Biden changes sanctions on Venezuela, but what have we really accomplished?

    Venezuela's economy has been in decline for since before Obama was elected. Their government has been plagued with corruption through Hugo Chavez's time in office and after his death in 2013. His successor Nicolas Maduro has also caused lots of controversy since taking control. His election wins had many allegations of fraud and is viewed as illegitimate by the United States and many others. Despite the huge economic struggles Maduro has held significant control over Venezuela with the support of Russia, China, and other foreign Powers. The United States supports Juan Guaido as the rightful president of Venezuela.

    During Trumps time as president he imposed harsh sanctions in a "maximum pressure" strategy. The hope was the Maduro regime would not be able to maintain control in this state, however with the help of Russia and China, Maduro was able to capitalize on certain opportunities Trumps policy created. Part of Trumps policy was to have US companies remove operations from Venezuela causing massive job loss, hurting the civilian population more than Maduro. In the energy sector especially Maduro was able to seize control of an oil company after French and Norway followed the US lead in leaving Venezuela. In response to such harsh measures from the United States, Maduro brought a case to the International Criminal Court in 2020 claiming they were a crime against humanity.

    Since taking office Biden has rolled back the "maximum pressure" policies and is attempting more targeted approach with his sanctions. The goal to remove Maduro from power has remained constant but now more consideration to the real impact is being taken. The United States is trying to remove Maduro because he has created a dire situation for the Venezuelan people, however if attempts to remove him can also hurt the Venezuelan people, careful attention must be paid to what really works and whether or not the consequences are greater than the benefits.

Links:

https://www.uschamber.com/series/above-the-fold/overhaul-of-us-sanctions-policy-toward-venezuela-long-overdue

https://www.laprensalatina.com/venezuela-asks-icc-to-probe-us-sanctions-as-crime-against-humanity/

https://www.nbcnews.com/think/opinion/biden-needs-assert-u-s-leadership-venezuela-maduro-exploits-negotiations-ncna1278382

https://www.reuters.com/article/us-venezuela-politics-support-factbox/guaido-vs-maduro-who-is-backing-whom-in-venezuela-idUSKCN1S62DY

Japan seeks to ease military restriction through defense transfer deal with Vietnam

East Asia has always been very interconnected in the history between nations and their conflicts and cooperation with one another. The East Asian countries have also had their fair share of economic and political pursuits, which in turn has led to many problems. Taiwan, Japan, North and South Korea, and China are all intertwined in this very unique socio-political atmosphere that always has some kind of event or issue at hand.

    

    In Recent news, some Japanese government officials have made some comments about Taiwan and how they are supporting Taiwan, and are concerned about a potential attack on Taiwan from China; especially with a suspected Chinese Submarine off the coast of Japan, but this of course could just be a coincidence. China has taken notice of these comments and newfound support for Taiwan and have not taken too kindly to these Pro Taiwan ideals. China has a history of not liking or supporting any country or person who thinks that Taiwan should be free, and this is especially problematic since China and Japan have been allies since World War Two. 

    Due to these recent developments Japan met Vietnam to discuss and sign a deal that would transfer both technology and defense equipment to Vietnam. The main goal of this deal would be expanding Japan's influence to solve regional security issues and the equipment and technology are meant to aid the Japanese military in its efforts to help increase security. In this deal Japan hopes to expand its military presence in the likes of Indonesia and other parts of Southwest Asia as well. Asian Media has dubbed this situation as nothing more than a dig at China and this does seem to be quite true.

Wang Yi, both a Chinese foreign minister and state councilor visited Vietnam to discuss Japan's motives with Nguyen Phu Trong, who is both a General Secretary of the Communist Party of the Vietnam Central Committee, and the Vietnamese prime minister Pham Minh Chinh. According to several reports Wang reminded these officials “China and Vietnam must abide by the political consensus already reached over the South China Sea issue and avoid any unilateral action that may complicate the situation and escalate disputes.” Whether or not Vietnam will listen to China has yet to be seen, but I do think it is important to keep an eye on this issue as any time East Asia has a conflict, it has several parties involved and can and could get messy. There is also the possibility of tariffs and other economic outcomes which could spread to the rest of the world.

Sources:

https://www.globaltimes.cn/page/202109/1234044.shtml

https://thediplomat.com/2021/09/parsing-japans-support-for-taiwan/

https://news.yahoo.com/japan-detects-suspected-china-submarine-074447208.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAMuHVxxGF3FcfJDoAUCt3sLcgoE0gzAHps39kIycUka-tLmQgf6ycpwn85nUMRyrMSHM2BJran8U3W779ljhfp1m1MSlmlIs5PfPskuXK7QkatvAVSzk3SnbS3hAbUOShQoSlRZN5gbsAEgWUg2gvvb1ykixqYbl-6LHqxDfSQCa

On the 20th anniversary of 9/11, we briefly explore the economic impact of the tragedy

 20 years ago today, on the morning of September 11th, 2001, four commercial airlines were hijacked mid-flight by alQaeda terrorists. This terrorists attack would ultimately kill 3,000 Americans, injure another 25,000 and send shockwaves throughout a whole nation. On the 20th anniversary of this attack, we dive inside the immediate economic affects that took place.

For New York- In Manhattan, New York the World Trade Center buildings, more commonly known as the Twin Towers were directly hit by aircrafts resulting in their collapse soon after. These 110 story buildings were home to financial firms and 400+ other top-tier businesses. So how did this tragedy more specifically affect the New York economy? It did so in a variety of ways. First, through the cost of the loss of life. The value of life lost in 9/11 was valued at $24 billion, that includes the $10 billion the people who died at the World Trade Center would’ve received in income. Next, was the cost to rebuild. To replace New York’s lost and destroyed infrastructure costed $21.8 billion. Overall, when factoring in the lost supplies, utilities, equipment and cleanup on top of the mentioned infrastructure and value of life, the direct toll of the attacks costs $55 billion. 

For Airlines - The terrorists compelled their attacks with the use of American commercial flights, which were unfortunately full of civilian life. This immediately inserted fear in all Americans when it came to flying. As a result, the airline industry immediately took a massive hit. From 2001 to 2002, the U.S. air industry reported $19.6 billion in losses. While from 2001 to 2010, the airline industry suffered $74 billion in loses. In order to prevent future attacks and create a sense of security to the American people, airlines needed to add extra security at airports. The TSA, (Transportation Security Administration) took control of this mission with the aid of increased funding, which comes from American taxpayers. Their 2020 proposed budget was $7.79 billion. With this extra security comes longer waiting, which was reported to cause a loss of $10 billion a year in lost time following 9/11/2001. To counter lost time and flying all-together Americans started to drive more instead of flying. With an abundance of increased drivers, comes increased driving deaths. It’s reported that as many as 2,300 driving deaths could be attributed to the terrorist attacks. The estimated death total costs from increased driving is reportedly $19 billion. Fear was evident following the attacks, as 9/11 was estimated to bring $61 billion in losses to the travel industry- excluding airline travel. 

For the Nation - The attacks on 9/11 sent a shockwave throughout the entire nation, despite it only directly appearing in a few parts. This shockwave brought fear, distraught, and loss with it. The economic loss it brought was significant in various aspects. The US real GDP saw a 0.5% decrease instantly after the attacks, as the increased external war and internal conflict proceeded to negatively affect the GDP growth in the year of the event. The job market too was impacted as 9/11 reportedly resulted in an 0.11% increase in the unemployment rate, which amounts to 598,000 jobs lost. The attacks also fueled debt creation and assets inflation, particularly in real estate, while simultaneously extending the March recession by causing the economy to retract by 1.7%. The Department of Homeland Security gained traction following the attacks of 9/11, and then exploded. Increases in defense spending related to the 9/11 attacks costs $589 billion by 2011 alone. Within that cost of $589 billion, is $110 billion of national intelligence spending for domestic intelligence efforts only. Meanwhile, the cost of war and terrorism skyrocketed for the United States as well.

The horrific attacks on 9/11 will never be forgotten. Meanwhile the economic affects of 9/11 will never go uncounted for. 

Undoubtedly, as said by Former United States Secretary of State Colin Powell, “You can be sure that the American spirit will prevail over this tragedy.”