Taking a break from elections, this week’s charts update our May 2023 analysis, “The Four Addictions.” There we observed America’s growing and increasingly unsustainable dependencies on debt, China, digital technologies, and easy money.
Our central challenge this decade is kicking these four addictions without crashing economies, stifling innovation or provoking wars. Here’s how things look 15 months later.
1. Debt: Outlook Worsened
Federal debt as a share of our economy is tracking to exceed the World War II record by 2027, with the U.S. spending more on interest payments than defense for the foreseeable future. While 2023’s bipartisan debt ceiling deal reduced future debt by $1.3 trillion over a decade, experts predict annual deficits over $2 trillion this next decade, no matter who wins the White House.
2. China: Outlook Worsened
While the U.S.-China bilateral trade deficit fell to its lowest since 2010, the world has grown even more dependent on goods made in China as the PRC attempts to export its way back to economic health. (Experts debate whether increased U.S. imports from third countries are merely re-routed Chinese goods). Expect ongoing trade wars (tariffs/export controls/investment limits) and rising geopolitical tensions regardless of who wins in November.
3. Digital: Outlook Mixed
There’s little sign of reduced digital dependencies and growing evidence of negative societal externalities,…