Fighting the Last Battle…

There are some pretty big problems in the world today. But just as we tend to ignore the positive (see Eric’s first page article), we also tend to miss the fact that slowly and without much fanfare things can change. While none of the problems outlined below are fully solved, they are seeing improvement.

Illegal Immigration

The debate on how best to crack down on illegal immigration has reached epic proportions. But while Republicans and Democrats struggle to arrive at a workable solution, the problem itself appears to be abating. According to the Pew Research Center, in 2016, 10.7 million unauthorized immigrants resided in the U.S. -- or about 3.3% of the U.S. population. This is a 13% decline from the peak 12.2 million level established in 2007. Interestingly, a decrease in the number of Mexicans crossing the border was the biggest contributor to the decline.

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U.S. Trade Gap with China

Our nation’s trade imbalance with China has dominated headlines the last two years. Policy prescriptions aimed at reducing the trade deficit have included dismantling decades - old trade agreements and a barrage of real and threatened tariffs. China’s recently reported December trade surplus with the U.S. which hit record levels only added fuel to the fire. But a closer examination of the underlying data paints a different picture. China’s full-year 2018 trade surplus of just under $352 billion was the lowest since 2013. A rising middle class and related shift toward consumption-led growth is fueling the reduction (see chart above). Today, more than three quarters of the country’s GDP growth comes from consumption, up from just 50% just ten years ago.

Also misunderstood is the fact that reported trade figures typically include only the value of traded goods. When you add in services and the sales of U.S. subsidiaries based in China, the trade deficit nearly disappears.

Healthcare Funding:

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Healthcare funding has been a central debate for decades. While mandates included under the Affordable Care Act (ACA) expanded the roll of insureds, calls for publicly funded or universal healthcare remain. But interestingly, as the chart to the below shows, after the imposition of ACA mandates, almost half of all Americans now are receiving some form of publicly funded healthcare.

This observation does not suggest that our approach to funding is without flaws. Healthcare in the U.S. remains the most expensive in the world (we spend about 17% of our total GDP on healthcare) and our outcomes, despite this, are subpar.

The point here? Human beings have a tendency to get so locked into their positions that they fail to see how the world is changing around them. While it may not always change for the better, sometimes it does.