Connect with us


Welfare Transformation Ushers in “Super-Boom Period” in the United States



Authors: Chan Kung and He Jun

With Joe Biden emerging victoriously in the U.S. presidential election, the “Trump Era” that disrupted both the United States and the world is coming to an end. However, the internal changes in American society as reflected in the general election is beyond simple winning or losing. Americans showed great enthusiasm in voting this year, and more than 150 million voters cast their ballot even under the severe COVID-19 outbreak. Biden had received more than 73 million votes, which not only set the highest turnout rate in more than a century, but also the number of voters reached the highest in history. It is worth noting that Donald Trump still has the support of more than 73 million Americans. The public opinion of American society reflected behind the numbers is profound and cannot be ignored.

Many have mistaken American politics to be merely about the Congress, the President, and the Pentagon. The reality is that the foundation of American politics lies not in these places, but in counties. From the perspective of the U.S. electoral process, although Biden is the winner, the whole process was rather “tortuous” as there have been many twists and turns. The process of Biden’s victory, as a matter of fact, was more complicated than previously expected by the ANBOUND research team, and the gap between the two parties was also smaller than what had been previously thought. The fierce competition in this election shows that the degree of mobilization of American society, the degree of organization of social groups, and the degree of high-level participation of various ethnic communities have reached a high level. The superficial polls and data analysis from the media are full of errors and are incapable of reflecting the internal changes in the American society, especially among the grassroots. This year’s election process in Georgia, Arizona, Pennsylvania, Michigan, Wisconsin and other states alternated between blue and red, and finally there was turnaround. The changes of voting pattern in “county politics” played a big part throughout the United States; even in a red state like Texas which primarily consists of Republicans, this trend holds true. With such volatility in election, if “county politics” is ignored, one would not understand the social organization and mobilization of this level, and it will be difficult to have an objective prediction of Trump’s early lead and the subsequent turnaround.

The extremely high voting participation rate in the 2020 U.S. election not only shows the foundation of the American public opinion, but also contains the source of power for American social and economic development in the future. What do these grassroots voters who have been mobilized in large numbers want? How should the Biden administration meet their needs? All these will be related to the future political and economic development of the United States. Researchers at ANBOUND believe that the post-Trump American society is likely to opt for a welfare-oriented transition, which is likely to become an important direction to promote the long-term prosperity of American society and economy.

From both an economic and political economy perspective, the vitality and sustainability of capitalism come from its self-evolution and improvement according to the needs of social development. Generally speaking, when a country’s economy has developed to a considerable extent, the level of social welfare will be improved. Unlike the developed capitalist countries in Europe (mainly Western and Northern European countries), which have generally opted for a high-welfare model, the United States, which favors liberal capitalism, does not have a high level of social welfare. It is staggering that the United States, the world’s major superpower, does not have universal health coverage. That was in fact one of the key reasons why former U.S. President Barack Obama pushed for the Affordable Care Act (commonly known as “Obamacare”).

There is a strong demand to improve welfare in American society. U.S. Senator Bernie Sanders, who has performed brilliantly in the last two U.S. elections, has gained support in the U.S. because of his welfarist ideas, including significantly increasing the level of welfare, reducing health care costs, and promoting social justice. In the capitalist United States, Sanders’ political positions lean toward the socialism”. During his political career, Sanders has been advocating the establishment of a single-pay medical system for all. His view is that medical services are the basic right of all people, and the United States should, like other industrialized countries, protect this basic right.

Improving the level of welfare is an important means of achieving balanced social development. With the development of technology and the capital market, inequality in American society is increasing. Data show that the wealth of the richest 1% of the U.S. population is US$ 34.2 trillion, which is equivalent to 15 times the wealth of more than half of the U.S. population. Data also show that the wealth of the richest 50 individuals in the United States is equal to the combined wealth of the poorest 165 million individuals in the United States. The Federal Reserve estimates that the richest 10% of U.S. households hold 69% of the nation’s wealth (or US$ 77.3 trillion), up from 60.9% in the late 1980s. An important means to change all this, in addition to adjusting fiscal policy as some economists have suggested, is to increase the level of social welfare so that the public can live a dignified middle-class life.

Figure 1: U.S. National Health Expenditure as a Share of GDP, 1960 – 2021

Source: Centers for Medicare & Medicaid Services

Judging from the situation of the U.S. election, the future U.S. government will face greater pressure to improve the level of social welfare, which will be reflected in several important areas such as health care, education, and consumption. Significant improvements in these areas could lead to greater support among Democrats and Republicans on both sides of the aisle. If the Biden administration were to follow this path of transformation, “Obamacare” would become “Bidencare”. This is determined by grassroots politics in the United States, and a transition to a welfare society is inevitable in the United States.

What are the consequences for the United States to raise its level of welfare? ANBOUND’s research team believes that this will bring a longer period of super-prosperity to the United States. Obviously, not every country can seek super prosperity by raising the level of welfare. To achieve this goal, there must be two conditions that exist simultaneously. The first is to be “rich”, and the second is to produce large-scale welfare consumption. Therefore, to realize the welfare transformation of the United States, a fundamental question is that “where does the money come from”? To answer this in simple terms, there are two sources of money to support the transformation of the welfare system. The first is from the growth of fiscal revenue, such as tax growth through sustained economic development; the second is from the continuous printing of money, i.e. relying on the country to continuously expand credit. For the United States, the former is a conventional approach, and it is an important foundation for supporting the welfare system. However, the speed of relying on tax growth to support the welfare system is too slow, and there are difficulties in meeting the huge needs of the United States for the transition to welfare in the short term. The latter is what the United States has been doing after the financial crisis in recent years, i.e. expanding credit through continuous printing of money and expanding debt to support current spending needs. This approach in the United States has, to a certain extent, already possessed the characteristics of modern monetary theory (MMT) that fiscal expenditure precedes revenue and fiscal deficits are not restricted.

However, whether under the conventional fiscal and monetary theory or under the MMT, the increase in government debt and fiscal deficit is accompanied by credit expansion, and the continuously expanding credit requires a huge market to digest and cooperate, and a country’s welfare transformation should provide huge “market” for welfare consumption. Among countries in the world, based on the credit as a major power and the strong dollar system, the United States has the ability to support the transition to welfare-oriented through continuous expansion of credit. If this mechanism runs smoothly, it will bring about a huge change in American society and may usher in a period of super prosperity in the United States.

For the United States, welfare improvements in the following three areas are likely to bring significant results.

The first is medical security. The United States spends hugely in the medical field but lacks universal coverage. Data reveal that from 1996 to 2013, the U.S. medical and health expenditure soared by US$ 900 billion. In 2013, the total U.S. medical and health expenditure reached US$ 2.1 trillion; in 2018, it was approximately US$ 3 trillion. Now, this figure may have exceeded US$ 3.2 trillion, equivalent to 18% of the total U.S. economy. If the coverage of medical insurance is expanded and universal medical insurance is achieved, the medical expenditure in the United States would reach US$ 5 trillion. Using this to calculate medical consumption, a huge national healthcare consumer market will emerge in the United States. Currently, the annual education expenditure of all levels of government in the United States exceeds US$ 1.2 trillion. The second is the education. Since 1980, the proportion of U.S. education expenditure to GDP has been relatively stable at more than 5%. Although the U.S. government’s allocation in education is high, American college students still need to pay high tuition fees and have to bear the burden of education loans. So far, the balance of student loans in the United States is approximately US$ 1.5 trillion, surpassing auto and credit card debt, and second only to housing debt. It can be seen that the education sector is also an important area of welfare transformation; rough estimation shows that its scale is more than US$ 2 trillion. The third is the consumption. The United States is a major consumer market. An increase in welfare supply equals an increase in wages, which is the basis for consumption growth. Nationally, in 2018, the consumption expenditure of U.S. households was US$ 14.14 trillion, which was divided into two parts, namely consumer goods and services. The former accounted for 35%, and the total household consumption expenditure reached US$ 4.94 trillion; the latter accounted for 65%, and the total household consumption expenditure reached US$ 9.19 trillion. If only healthcare is considered, the healthcare consumption expenditure of American households a year amounts to US$ 2.4 trillion.

Based on the above three areas, if the United States fully implements welfare transformation, it will create a super consumer market of nearly US$ 10 trillion. It should be noted that this US $10 trillion market scale is not created out of thin air by the Fed through money-printing, but rather the economic development of the United States itself has provided sufficient support for this market. At the same time, the situation where unlimited money issuance in the United States can be maintained before the status quo of the United States’ national capabilities and national credit, and the U.S. dollar system are being truly threatened. This signifies that a system reform can indeed create a huge market. It is entirely possible for the United States to achieve prosperity for a long period of time through welfare transformation, and the United States will usher in a “super-boom period.”

Final analysis conclusion:

The post-election United States is likely to transit to become welfare-oriented, which will create a huge market and maintain a period of prosperity for a long time.

Founder of Anbound Think Tank in 1993, Chan Kung is now ANBOUND Chief Researcher. Chan Kung is one of China’s renowned experts in information analysis. Most of Chan Kung‘s outstanding academic research activities are in economic information analysis, particularly in the area of public policy.

Continue Reading


Biden: No More “Favourite Dictators”



Joe Biden
Official White House Photo by Adam Schultz

 Former US President Donald Trump shared a strong personal rapport with Turkish President Recep Tayyip Erdogan, Saudi Crown Prince, Mohammed Bin Salman (MBS) and Egyptian President Abdel Fattah Al Sisi. Trump made no bones about the fact, that he got along well with authoritarian leaders – especially in the Middle East. At the G7 Summit in 2019, Trump while looking for Egyptian President had even said, “Where’s my favourite dictator?”

Statements made by Biden before taking over as US President

On the other hand, Joe Biden before taking over as US President had repeatedly criticized Erdogan, MBS and Sisi for their poor human rights record, and had unequivocally stated that none of them would have a free pass in a Biden Presidency.  Biden had on numerous occasions flagged the dismal Human Rights record of Saudi Arabia, especially MBS’ involvement in the murder of Saudi Journalist Jamal Khashoggi, and lashed out at Trump for soft pedaling on the issue because of his personal rapport with MBS. Similarly, in August 2020, Biden had dubbed Erdogan as an ‘autocrat’ and also expressed the view that the US needed to lend support to opposition parties in Turkey. Biden had also issued a warning to Sisi, saying that there would be “no more blank checks for Trump’s ‘favourite dictator’.”

How President Biden has approached relations with the three leaders

During the Biden Administration, ties with Saudi Arabia have witnessed a change. A report which clearly points to MBS’ role in the murder of Saudi journalist Jamal Khashoggi was released (Trump had refused to release this report). The US has withdrawn support for the Saudi war in Yemen, and defence agreements signed between the US and Saudi Arabia, during the Trump Administration have been put on hold. Yet, Biden while sanctioning Saudi officials in connection with the Khashoggi case, in addition to those sanctioned by the Trump administration, refused to impose sanctions on MBS owing to the strategic importance of Saudi Arabia in the Middle East (Saudi support is essential for the revival of the Iran Nuclear Deal/Joint Comprehensive Plan of Action-JCPOA) and the strong US-Saudi relationship. It would be pertinent to point out, that Biden’s decision not to impose sanctions on MBS has drawn strong criticism from many including members of his own party.

If one were to look at the case of Turkey in recent months, the Turkish President has himself toned down his Anti-West rhetoric and described his meeting with Biden on the sidelines of the recent NATO Summit as fruitful. While commenting on the meeting with Biden, Erdogan stated that ‘ We believe there is no problem that cannot be resolved in Turkey-US relations,’

The US President also said, that the meeting with Erdogan was positive and expressed hope that the bilateral relationship would improve in days to come.

While the meeting between Biden and Erdogan was positive, differences between both sides still persist over Turkey’s purchase of S400 missiles (the Trump administration had imposed sanctions in its final days and Turkey had also been removed from its F-35 fighter jet program)

Turkey’s strategic relevance

Turkey has stated that it is willing to play a role in security in Afghanistan, and guard Kabul airport, after the US troop withdrawal from Afghanistan. The Turkish President did say that Turkey would require diplomatic, logistic and financial support that the United States. The Biden administration’s outreach to Turkey indicates that in spite of differences over key issues, Istanbul’s potentially important role post the US troop withdrawal from Afghanistan is something, the US will not ignore. Erdogan on his part needs to have a reasonable relationship with US, given the fact that the Turkish economy has slowed down significantly.

If one were to look at the case of Egypt, Egyptian President Abdel Fattah Al-Sisi role in the ceasefire between Israel and Palestine, was acknowledged by the Biden Administration. While the US President during a telephonic conversation hailed Sisi for his ‘successful diplomacy’ in the Israel-Palestine ceasefire, the Secretary of State Anthony Blinken said:

‘We have had in Egypt a real and effective partner in dealing with the violence, bringing it to a close, relatively quickly. And now, we are working closely together to build something positive’

It would be pertinent to point out, that during his telephonic conversation with Sisi, in May 2021, Biden did flag the need for a ‘constructive dialogue’ on human rights in Egypt


While it is easy to criticise Joe Biden, he has the onerous responsibility of striking a  balance between values, which he has repeatedly referred to even after taking over as President, with US interests. Given the complex geopolitics of the Middle East, Biden while refraining from taking steps, which may be counterproductive has flagged his concerns with regard to Human Rights, and sent out a strong message that bilateral relations will be dictated by substance and not mere personal chemistry or optics. At the end of the day it is important not to forget Miles’s law — ‘where you stand depends upon where you sit’.

Continue Reading


The liberal international order has not crumbled yet



Since 2017 when Donald Trump took office, the “liberal international order” erected in 1991 has been under serious challenges raised by the United States’ relative decline, the Trump administration’s isolationist policy, and on top of that, the outbreak of COVID-19. Indeed, this order is greatly plagued, which is evidenced by its dysfunction. Against this backdrop, its endurance in the upcoming time is questionable. Nevertheless, the liberal international order has not collapsed yet. It will even revive, and endure in the post-pandemic era.

The victory of Biden 

Notwithstanding facing great threats, the liberal international order is far from crumbling. On the contrary, it is gradually reviving. In the Western world, countries are making effort to reform their order that is on the verge of collapse. This is true in the US – the world democracy’s leader. Joe Biden’s victory against Donald Trump may be a positive signal for the US and the global democracy. As a strong advocate for values including democracy, multilateralism and international trade, at no doubt, President Biden will be opposite to Trump in his policy, both domestic and foreign ones. Indeed, during his first 100 days, Mr.Biden has implemented some meaningful things. Regarding the pandemic, he has a stricter approach than his predecessor’s: Mandatory mask wearing, a $1.9-trillions bill, historical vaccination campaign, to name a few. All of Biden’s actions have been so far effective, when the new cases and deaths are steadily declining, and the number of vaccinated people is substantially high. This lays a foundation for Biden to reinvigorate his country’s ruined democracy and governance system, as his efficiency in countering COVID-19 may help him regain American people’s trust on the future of American democracy.

In terms of foreign policy, President Biden has some radical changes compared to that of Trump, which might be favorable to the Western world. At first glance, Biden embraces multilateralism much more than his predecessor, with the hope of saving the American global leadership. He supports Washington’s participation in international institutions, which is illustrated by the rejoining of WHO, Paris Agreement and several multilateral commitments. In tandem with this, Biden values the US’ alliances and strategic partnership as vital instruments for the US’ hegemony. Unlike Trump’s transactional approach, Biden prioritizes early and effective engagement with allies to tackle regional and global issues, especially major ones like NATO, G7. In Asia, he also seeks for further cooperation with traditional allies such as Japan, Australia, New Zealand and deepening partnership with Vietnam, Singapore, India and ASEAN countries.

More importantly, President Biden’s policies towards the US’ competitors and “rogue states” are far different from Trump’s. Granted, despite seeing China as the biggest threat to the American global leadership, Biden adopts a more flexible and multilateral policy. His administration looks to cooperate and compete with China, which implies a different trajectory of the US-China relationship in the upcoming time. Additionally, as noted above, instead of unilaterally escalating tensions with China as Trump did, Biden has been forging relations with traditional and potential Asian allies to contain China together, given China’s increasing assertiveness. With regard to Iran, Washington is now working on the Iran Nuclear Deal with other six parties, promising a potentially positive future on the relations of Iran with the US and the West. The bottom line is, a radical change in Biden’s foreign policy will be a clear message to the world that the US will still try to save the liberal international order and make this world safer for democracy.

The European Union is recovering 

Things are happening in the same pattern in Europe. European leaders are also closely cooperating, both inside and outside the bloc, to defeat COVID-19. That said, they are ardently supporting multilateralism. So far, the EU has spent billions of dollars in vaccine development as well as humanitarian support, demonstrating its solidarity in the battle against COVID-19. As such, if EU leaders can successfully lead their bloc out of the current crisis, they can reform this currently plagued institution in the post-pandemic era. Not only seeking further intra-bloc cooperation, but also European leaders are working with other major actors around the world to substantiate the global battlefront against COVID-19. Recently, German Chancellor Angela Merkel urged her country and China to jointly develop COVID’s vaccine in an open, transparent way, and to a further extent, maintain good and stable bilateral partnership, regardless of two sides’ differences.

Similarly, the EU has been putting the Transatlantic relationship among the priorities of its foreign policy agenda. After Biden’s election, the European Commission has proposed refreshing the US-EU alliance and establishing a Transatlantic Trade and Technology Council, being seen as an informal tech alliance with the US to prevent China from dominating this critical sector. The Transatlantic relationship is perhaps one of the pillars for the liberal international order, given its long history and its contribution to maintain the global stability. In the last decades, this axis has been damaged by numerous issues, from economic to security, which is one of the main causes for the decline of liberal international order. Thus, a fresh Transatlantic relationship is conducive to the re-emergence of this order. In this respect, the EU’s effort to strengthen the Transatlantic alliance, despite being questionable in terms of feasibility and outcome, is still paving the way for reinvigorating of liberal international order. More notably, the most recent G7 Summit has illustrated the Western’s solidarity, when there is a convergence in most issues related to global governance and maintaining the Western-based order. This may be a harbinger of the liberal international order’s revival, at least in a foreseeable future.

Non-Western world is struggling 

The dynamics outside the Western world is also changing in a more favorable direction. Many non-Western countries, once were effective in combating against the pandemic, are now struggling with a greater threat. Taiwan, in spite of being praised as one of the most successful states in the battle against COVID-19, is currently facing another wave of pandemic when the new cases in this island are surging recently. Other successful stories, let us say Thailand, Japan or South Korea, are questionable of maintaining their momentum in preventing the virus, showcased by their relatively inefficiency during this new wave, in implementing strong measures and getting their people vaccinated. This raises question about these countries’ model of governance, which was used to be praised as a better alternative for a plagued, dysfunctional Western one, thanks to its merits in helping those above-mentioned states contain COVID-19.

Major non-Western blocs are in the midst of COVID-19 crisis as well. The clearest example is the BRICS. Except China, all other countries in this bloc have been tremendously suffering from the pandemic. Due to this, they are far from being recovered quickly. This failure in dealing with the virus undermines the bloc’s previous effort in establishing its position as a major, effective one, not to mention building a new, non-Western international order. This is also the case with ASEAN, as the organization was sharply divided by COVID-19. There are countries doing well with controlling the pandemic such as Vietnam, Singapore, but the Philippines and Indonesia are unable to do so, making this bloc suffering from institutional sclerosis without having any coherent COVID-19 policy. Therefore, non-Western blocs and countries are far from being more efficient than Western ones, implying they are unable to come up with any better international orders than the current liberal international one.

More importantly, Western values underpinning the liberal international order are universal. This is noteworthy when arguing for the long-lasting of Western order, as its existence and endurance mainly hinge on the universality of Western values. These values have been embraced by many countries for a very long time. Hence, despite being deteriorated in recent years, they cannot be easily changed. On the other hand, non-Western values are also not as highly embraced as Western ones. China, desiring to topple the US, is initiating numerous projects and agreements to spread its values around the world, making the world less Western and more Chinese/Asian. Nonetheless, Beijing has yet achieved any remarkable achievements in making their values more widespread and embraced by the rest of the world. Even worse, its image has been tarnished due to its rising assertiveness. Its projects in developing countries, especially BRI-related projects, have been notorious for a large number of problems related to environment or local corruption, and it is raising strategic uncertainty in the region by its increasing militarization, particularly on the South China Sea. These movements have turned China into a “malevolent” major power, hindering its process of disseminating and socializing its values to the world.

It is also worth noting that although Western values have declined, they have been proven to be benevolent for this world. Most recently, it is Western countries that have successfully developed good COVID-19 vaccines to save themselves and save the world from this unprecedented health crisis. Non-Western countries, for instance China and Russia, have their own vaccines, but they are not as welcome as other developed countries in the West in the vaccine race, because their vaccines are relatively less effective than Western-produced ones. Democracy, liberty, lassaiz faire are values that help Western countries or ones embrace such things able to produce massive amount of effective vaccines, and more broadly to develop a strong science and technology foundation. Producing and distributing vaccine for the rest of the world would make the West become a savior, which is good for saving the liberal international order.

Without doubt, the liberal international order has been in its worst time since 1991 when it reached its heyday. However, thanks to its merits, the liberal international order will not die. Instead, most countries will jointly save it, because they have been benefitting from this order for a long time, and will be so in the future. The order’s founding members are recovering, and cooperating closely to reform it, as well as there are no better international orders that can replace the existing one. Given these circumstances, the liberal international order would re-emerge as a dominant form of ordering this world after the pandemic, and would be perpetuated.

Continue Reading


Who benefits more from the Biden-Putin summit in Geneva?



With the Putin-Biden summit in Geneva around the corner, the question is who actually benefits more from the meeting in the small Swiss town.

Mainstream media and right-wing foreign policy thinkers alike have argued that a joint press conference would “elevate” President Putin to the level of the American President.

Ivana Strander, the Jeane Kirkpatrick fellow at the American Enterprise Institute in Washington DC, argued that the upcoming Geneva summit is actually “a gift” to Putin.

In a CNN story, Kaitlan Collins and Kevin Liptak mention that “officials who have been involved in arranging past US meetings with Putin say the Russian side often pushes for a joint press conference, hoping to elevate Putin’s stature by having him appear alongside the American leader”.

Whether as a subconscious bias or an actual reflection of attitudes, prevalent is the idea that coming close to the US President is a privilege that other leaders can only dream about. But who gains more from the upcoming summit?

In fact, it is the American President who is vying for other leaders’ approval and acceptance once again after a humiliating period – not the other way around. American is emerging from Trumpism, which revealed the other, ugly face of America. Trumpism is not gone and the other face of America is still there.

This week, US President Joe Biden is eager to show the world that America is “back”. In meetings with the G7, NATO countries’ top leaders, the NATO Secretary General, the Queen of England, and President Putin in the same week, Biden is asking the world to forget the last four years. And he is not doing this from the position of power or superiority. That’s why assuming that other heads of state, be it Putin or anyone else really, can only gain by coming close to the superiority of the American President is a misplaced and misguided. The US President is asking the international community to take America back – not the other way around.

President Putin doesn’t need the US President’s acceptance – Putin already got that. That happened back in 2018, in Helsinki, when President Trump sided with Putin over the US government’s own intelligence agencies, by rejecting the idea of Russia’s meddling in the US presidential elections. Trump slapped across the face and humiliated the US intelligence community in front of the whole world. Ever since, the US intelligence community has tried to figure out ways to prove Trump wrong and show him otherwise. And they have gone to incredible lengths, only so that they can get their pay pack of a sort, and prove Trump wrong. So, Putin already got what he wanted. He doesn’t need more “elevation”.

What’s also striking is that in Geneva, the UN is absolutely missing from the action. Geneva is the home of numerous UN agencies and international organizations, and not one is actually involved, which speaks volumes to questions of relevance. It is the Swiss government from Bern which is organizing the Summit. The UN is nowhere to be seen which is also indicative of the current Biden priorities.

If Trump was about “America First”, then Biden is about “America is still number one, right?”. But as the United Kingdom learned the hard way recently, it is sometimes best for a declining power to perhaps elegantly realize that the rest of the world no longer wants to dance to its tune, or at least not to its tune only. Discussions about how much Putin gains from coming close to the presence of the US President are misguided. In trying to climb back on the international stage on crotches and covered up in bruises, America is not in a position to look down on other big powers. And as regards who benefits more from the Summit, it seems like one side is there with a clear request asking for something. My understanding is that it is Biden who wants Putin to hand cyber criminals over to him. Putin still hasn’t said what he wants from Biden, in return.

Continue Reading