Title: The carelessness of our administration’s fiscal policy and the long-term effects of the choices taken
To begin to understand macroeconomics, we must understand the dynamics of Gross Domestic Production (GDP). GDP is characterized by total output of a nation. This total output is completely equal to the total consumption. The reason being is looking at the inflow and outflow of all consumption, expenditures, and productions in an economy. The natural flow can be divided between a household (and government) and firms. Households and governments consume products and increase expenditures. In exchange for this consumption, firms give production. On the converse side of this, households and government provide factors of production (labor, resources, physical and human capital), in exchange for monetary capital provided by firms to trade for these factors. This is the principal cyclical ecosystem of a flowing economy. How the economy contracts and expands is given by the expansion of monetary capital spent, or a change in factors of production. This is why, in the macroeconomic perspective, all consumption and expenditures is equal to the production of a country. To mathematically represent these equations can be given by Y= C+I+G+Nx and Y= a*(f(L,N,K,H)), where Y is equal to total real GPD, C is consumption, I is investments, G is government expenditures, and Nx is net exports. The variable a is given by technological knowledge, which becomes a multiplier of the function of total labor supplied (L), natural resources (N), physical capital (K), and human capital (H).
The above mentioned will directly affect the quantity of output of a nation. These variables are, however, controlled under the classical dichotomy which separates the nominal and real. Nominal variables are characterized as being directly correlated to current price levels and money supply. Real variables are characterized by true purchasing power of tangible assets and capital (example of distinction: price of Bananas to dollars may be $5, price of Bananas in the US versus price of Bananas in Bangladesh). The importance of this distinction is to highlight the differences in true purchasing power of US Dollars due to higher rates of inflation (inflation erodes purchasing power of fiat currency in the long run). This is also important to understand dichotomous variables such as real and nominal: GDP, interest rates, and exchange rates.
In 2017 as Jerome Powell accepted the appointment of Federal Reserve Chairman during the Donald Trump Administration, there was an immediate hashing between the two “independent” entities (In quotation independent because, by law, the federal reserve and the white house are two parallel entities. However, due to political pressures, the opinions of the two entities often converge at a tangential point of policy making). As Jerome Powell succeeded Janet Yellen, he was known to have a hawkish outlook on the fiscal policy, similar with Janet Yellen. Within the first year of appointment, though, political pressures built up from the Trump administration and Jerome Powell was pushed to have a more lenient outlook on fiscal policy and lower interest rates (that were risen from the quantitative easing administered from Bernanke (5% to 0%) to 1.5% done by Janet Yellen) to stimulate investment spending by the nation. The correlation between interest rates and consumption of loans follow a typical supply and demand chart, where interest rate is given by price of loans funded, and quantity is total loans funded. Equilibrium finds itself where supply of loans consumed is equal to total loans demanded. As interest rates are high, supply of loans are typically higher due to an incentive for national savings (can receive gains off excess capital by lending it out), however demand of loans are typically lower due to the expenditures incurred to pay back the loans (coupon payments on loans). In order to “stimulate the economy,” Donald Trump urged Jerome Powell to have a more Dovish standpoint of fiscal policy, citing that the economy had strengthened from the financial crisis of 2008, and needed to expand. Jerome Powell, after much debate, contended and decreased interest rates generously at a steady rate of .25 to .5 points over the next 3 quarters (into the end of 2018) until interest rates were sub 1%. The economy was booming; the major indexes hit all-time highs consistently for multiple quarters in a row. Then, in January 2019, Covid-19 began to breakout in the United States.
At first, the Donald Trump administration played this pandemic down, stating that it would be over within a couple of months. Cases started to erupt into the millions, and deaths into the hundreds of thousands with a month. In February of 2019, the economy receded almost 20% (represented by the major indexes of the market), causing panic and uncertainty to come. The Donald Trump administration pushed Jerome Powell to brain storm a strategy to salvage this catastrophe, and what was chosen was to continue to quantitatively ease the economy and increase government expenditures. The reason this strategy was so interesting was because of the specific type of government expenditures that were chosen. First, we must understand the concept of aggregate demand and aggregate supply. Aggregate demand represents total economic demand/consumption at a given price level. Aggregate demand will shift left (fall) in congruence to changes of: total consumption, total investment, and total net exports. As Covid-19 creates widespread panic and forced government mandates to shutdown businesses, total consumption obviously decreased. Typically, government expenditures will take place here (similar to the recession of 1980,1982, and 2001) and boost administrative subsidations to take over retail consumption. The interesting part of what happened in 2019 was the fact that government did increase expenditures, however, these expenditures began to be classified as government investment. What this means is that government did not increase direct spending and consumption of products, rather, they increased loans available for consumption. Typical government expenditures can be classified as things such as Infrastructure spending, defense spending, etc. Where the government takes ownership of the firms’ productions to make up for the missing expenditures by the public. The equation that is implemented here is given by the original C+I+G+Nx, where G increases as C decreases. What ended up happening was as C decreased, instead of G increasing, I (investments) ended up increasing. I=Y-(C+G+Nx)=S. Investment of a nation is typically given by how much a nation saves. Investment is necessary to continue to expand real GDP and increase factors of productions such as human capital (sending more people to college), physical capital (buying new machinery), and most importantly, increasing technological capacities to multiply the factors of production. Savings can be further broken down into S= I + Nx. Where I is domestic investments, and Nx is total net exports (which is also represented by total Net Capital Outflow). Since net exports is the selling of national capital to to other countries, USD is flowing outwards (for international assets), so as net exports increase, so do our savings.
The equation to represent the specific components of investment can be derived from I= Y- (C+G) (excluding net exports for now, given only domestic investments. Consumers pay taxes and government collect taxes. Therefore, the equation can be further integrated into I= Y — ((C-T) + (T+G)), where T is representative of taxes. (C-T) is called private savings, and (T+G) is public savings. As government collects more taxes from consumers, government savings (and expenditures) can increase, and consumer savings start to decrease. The reciprocal of this principle can be established as well, where, if government spends more, it must collect more in taxes to make up for its expenditures and net negative savings. This is typically seen with government funded bills (such as the Infrastructure Bill) where government incorporates a clause stating tax increases. The reason we highlight this right now is to understand where the mistake made by the government lies.
Going back to the equation S=I+NCO (where NCO is the same as Nx), we can see that our national savings is diversified among domestic investments and net capital outflow (whether or not net capital outflow is positive or negative). As interest rates decrease, net capital outflow increases due to the incentive of buying higher interest bearing securities and assets abroad (such as bonds), and the supply of US dollars in the money market increases. This increase of US dollar supply depreciates the nominal value of the US dollar in regression to other currencies exchanged, thereby also making US based products cheaper to purchase. This depreciation of real exchange rate should GENERALLY incentivize net exports (thereby further stimulating net capital outflow), but the conundrums lies within the cut back of production on the microeconomic scale due to lower price levels across the nation due to lower aggregate demand. This produces a problem- there is a higher spending of our savings, but no net exports to help outbalance this deficit. This is looking at it from a macroeconomic scale, which is not even taking into consideration domestic expenditure cutbacks. Which introduces our second big problem; a cut back in long-run aggregate supply, derived from an immediate cut in short-run aggregate supply.
Aggregate supply is defined as either long run or short run, backed by the same variables. When we look at our original equations defining real GDP, we look at the maximization points of output at a given price level. In the long run, price level is non-definite to classifying total output (difference between nominal and real), because total output of a nation is not defined by the amount of fiat currency in circulation (money supply). The total output is given by total technological knowledge, labor, human capital, physical capital, and natural resources. The total output is calculated using the maximization points of all these variables, giving the possible output potential (using natural employment rate, natural education rate, natural resource consumption rate, etc). When there is change in price level, it will only affect the aggregate supply in the SHORT run, meaning the supply will react for an elastic period of time based on how many firms are influenced by the short run effects. This equation is given by (Aggregate Supply in Short Run) = (Aggregate Supply in Long Run) + (# of firms) (Price level given- prive level expected). This emphasizes that a higher surprise in price level difference (given minus expected) multiplied by the number of firms affected will change the long run aggregate supply to give the defined aggregate supply in the short run. However, as period of time of short run aggregate supply goes toward infinity, short run aggregate supply will start to equal to long run aggregate supply. What this means is that if there is a significant long term problem affected the variables that define aggregate supply, it will change the total dynamics of potential output. Covid-19 wasn’t supposed to cause a long term problem to affect the variables of aggregate supply, but because of the fiscal policies chosen by our government, it did.
Because of the theory of sticky wages and sticky prices, when price levels fall (due to less aggregate demand), there is an immediate default of production and sales (firms sell less goods due to sticky prices and no one buying goods, and firms paying higher than expected wages). People consider this initial movement of short-run aggregate supply as an initiator of real GDP cut (which typically induces a recession). This recession that would’ve occurred is a natural part of the business cycle and would’ve adjusted as overall price levels dropped to move our aggregate demand to the long run aggregate supply. During the Covid-19 pandemic, as people were forced to stay home, less products were sold and consumed. As less products were consumed and sold, business started to decrease total labor force, increasing unemployment. Of course this was a problem, but there was a plethora of options to remedy this issue. What the government chose to do was immediately interject capital into the hands of consumers, trying to replicate the TARP act in 2008. What the government did not realize was that these were two completely different issues of economic crisis. With the CARES act(s), we increased our debt sheets by 8 trillion dollars, bringing our total national debt to approximately 30 trillion dollars. How exactly debt is financed by this government and the fallacies of their calculus is a completely different issue we will not focus on today, but what is important to reiterate is that this government expenditure became a government investment, with no way of financing the investment. It would’ve been good to help businesses to stimulate artificial economic growth, so these businesses could’ve/would’ve continued to keep people employed. As these businesses received a finite amount of government stimulus, they could’ve/ would’ve increased technological potentials to overcome the temporary issue of having to work at home, which did end up happening anyways. The main problem arises from the fact that the government did not focus on stimulating businesses to force them to retain employees, rather, the government artificially employed consumers with stimulus checks as the labor force started to contract due to firms not being able to sell any products. This artificial employment the government administered (and incentives created to CONITNUE to stay unemployed; i.e. PUA) altered the total labor force dynamic of our GDP. People started to have no incentive to return to work, as they were given free money by the government. Firms did fine, as the money trickled into total consumption increase to maintain price levels, and actually FLOURISHED as employment costs for firms decreased. The economy started to hit all-time highs after what seemed like a blip of possible recession. After February of 2019, the economy continued to hit all-time highs quarter after quarter. The Trump administration retired and named this a “success” and handed the reigns over to another incompetent administration that really didn’t know the monstrosities that lay ahead.
As people continued to remain unemployed to receive government benefits and continued to increase consumption, labor force started to expand again slightly as this influx of cash allowed for artificial expansion of real GDP, creating many new jobs. However, we focus on the definition of ARTIFICIAL real GDP. Real output is defined by the variables a*(f(L,N,K,H) as we defined before, highlighting labor to be one of the main components. As labor decreases, so does real GDP. What the government wanted to do was replace this missing labor force (and wages earned by labor) with stimulus checks given to consumers. However, this is not employment. This inevitably created a permanent gap in the labor force (as we will see). Unemployment was cited at 14.6% during the pandemic. Pre-pandemic it was cited at 4.5%. Unemployment is currently at 4.4%. So what seems to be the problem? The total labor force participation is still missing approximately 5 million people compared to pre-pandemic numbers. The total labor force was 64.8 pre-pandemic, during the pandemic was 61.1, now it is 61.8. Where are these discouraged workers? And what is going to happen when these people remain to be outside the labor force once government stimulus runs out? The Biden administration has already figured this catastrophically problem out, and instead of creating incentives to return to work, they are continuing to artificially stimulate the economy using government spending. However, this time this spending is actually government spending, and not government investment (where the money is “lent” (given) out). This would’ve been the right thing to do in the first place, but implementing this spending now is only continuing to drown our nation in debt it cannot finance. This increase in monetary supply also created our next major problem we focus on, which is inflation and the inevitable rise in price levels.
As we already described before with the supply and demand of loans, interest rate is considered the price received and paid for these loans. The introduction of monetary capital into the economy is done through government spending, whenever government spending cannot be financed by taxes and current public savings (T+G). The money is printed into supply and the fed gives it out in two major ways- one is through government spending (as described already), and the second is through loans to secondary banks (a.k.a. ‘Big Banks”). This money is lent out to banks using the federal discount rate (which was mentioned before as the federal interest rate), and to encourage higher on-taking of loans, interest rates fall. As central banking rates fall, people typically buy government bonds to put their money in “risk-free” interest generating income, which is higher than the central bank rates. As government bonds get bought up, the yields (interest rates) decrease (bond prices and yields have an inverse correlation). This is why we see a direct correlation between bond yields and central banking rates. We will come back to this topic, but for now, we focus on the creation and introduction of money into the economic system. As banks borrow money for less interest, there is an accrual of loans at the bank where they need to offset it to consumers, for a lower interest. Thereby, creating the “trickle-down effect” described and emphasized during the Ronald Reagan administration (which worked horribly, as there were 2 recessions during his presidency in 1980 and 1982). When people can borrow money for a cheaper price, there is a higher demand for investment. This induction of inflation can have the potential to stimulate the economy by allowing reduced costs for spending on production expansions, thereby increasing real GDP (output). However, what happened during the 2019 pandemic through 2021 is there was an addition of monetary capital within the economic system using BOTH ways of induction (government spending that turned into investment capital and federal quantitative easing). This seemed like a dream come true for the average American, as the annual household income rose significantly. Spending was ravenous, as consumer staples were outcompeted by the consumer discretionary markets (luxury brands, specifically thrived). The CEO of Louis Vuitton became the second richest man in the world at one point, behind Elon Musk. It was like the roaring 20s again. But the roaring 20s, as we know, came to a doomed ending known as the Great Depression.
As this influx of monetary capital was introduced to consumers during a time where firms were still reducing labor force, there was a period of supply chain shock. As we came out of the pandemic, firms were still operating with a lowered labor force that did not recover with the “reopening of the economy” so production could not keep up with demand. Price levels increased, inevitably, to make up for this gapping of revenue. The end result? Higher priced products, fewer products to buy, and an inevitable reduction in stimulus by the government which reduces the overall income of the consumer due to the continuing gap of labor force. The Biden administration wants to remedy this issue by decreasing the amount of bonds they buy (tapering; we will get back to this issue when we talk about bonds), and lining this up with an increase of interest rates. The administration is under the assumption that the causation of inflation is coming from the excess cash on hand of consumers, which can be true to an extent. However, the more formidable reason for this inflation comes from the firm’s lack of production and having to match price levels with quantity demanded. When we increase interest rates, the central bank essentially “vacuums” up the excess capital in the economy. It becomes harder to take on a loan, and it incentivizes people to save. This would be optimal in a scenario where nominal income = real income. However, we have created a situation that is similar to a socialistic economy where nominal income = real income + government income, and the event where (real income/government income) <1, meaning consumers, on average, receive more government income than real income. What will happen when government stimulus dries up, nominal income cannot be converted to savings due to sticky prices maintained by inflated price levels (by the producer). People will have to continue to spend more money than they were on consumer staples (such as groceries) until there is a total shift of aggregate demand to the left. Once this happens, there will be no more buffer by the government to maintain price levels, so producers will have to lower their prices on the limited goods they produce, making total revenue collected significantly suffer. This is just the first part of the overall depression we will face.
When we initially dropped interest rates to 0, there was a total positive net capital outflow. What this means is that there was a low interest in buying domestic bonds, and having USD flow out of the nation. As USD saturated the exchange markets, the relative exchange rates depreciated the dollar and allowed for the USD to be cheaper. This in part caused good in the United States to (temporarily) be cheaper. However, with the pandemic on setting, these relatively decreased prices were quickly adjusted due to the reduced overall aggregate supply. After other countries starting lowering their interest rates (some went negative), there was a decrease in net capital outflow (net exports), so the US dollar became stronger in comparison to other currencies. This increased the purchasing of foreign goods, which did increase consumption, but barely increased domestic consumption (real GDP). This allowed for more international goods to be consumed in lieu of domestic goods, which was overall “masked” because of the excess capital an average consumer had. As we increase our interest rates, not only will consumption of international goods decrease (because of a weaker USD), but domestic consumption will already be lowered (due to the explanation above). This is where our lower GDP trickles into creating lowered international GDP.
The bond market was created as a means of government raising capital from consumers in exchange for a fixed interest paid back on the “loan” (paid by future generation’s taxes). This worked as a wonder, until the 1980s when the bond market started to fail and interest rates skyrocketed. What did the US government do to combat this issue? The Fed took responsibility to buy the US Treasury’s bonds ON THE CONSUMER’S BEHALF. This is how we expanded the US budget (and continue to expand the budget). Jerome Powell increased the rate of this buying during the pandemic ($120 Billion in T-Bonds a month) to increase the government budget, to increase government spending (which we know turned into government investment). If you take a step back to examine what this really means, you will figure out that Jerome Powell increased the rate of our future taxes without our permission to give the government money they didn’t need to give us loans we didn’t want. This bond buying became a huge part of the US bond market’s demand curve. Traditionally, this curve should be mostly comprised of retail consumers. As tapering continues, what will happen is the US bond yields will steepen sharply as long term US bonds become increasingly unattractive to the consumer (since most of the demand for the last 2 years was from the government themselves). The 10, 20, and 30-year bond yields will sharply rise as people realize there is high chance of default on payment from the US government. This high chance of default arises from the ever-continuing raise in the debt ceiling, which can only be financed from these government bonds. Janet Yellen, the US treasury secretary, callously states that the recent spending bills have “already been paid for” when in reality they tremendously add even more debt we cannot possibly finance. But again, this is not something we will discuss in this journal, rather we focus on the default percentage increasing due to the government increasing their spending limits with no plan on how to collect their spending allotments with a speedier tapering of bonds.
As we continue to increase our government expenditures and raise our debt ceiling (another $3T), the treasury turns to two different ways of collecting payment. One way is if the fed buys the bonds to supply the cash to the US treasury (since the bond buying of the US public is miniscule in comparison to the fed purchasing of bonds. However, as we know, the fed is continuing to speed up its tapering so their purchasing abilities start to diminish. The other way the treasury collects payments is through taxes. Now, there are a plethora of ways the treasury has proposed to collect taxes. They are well aware that the labor force has shrunk so total tax revenue will be decreased tremendously. So what did they do? They restructured the tax brackets so the heaviest income earners are having to pay more. To reinforce this, the treasury allotted $3 billion to the IRS to increase efforts of tax collection. There are many, many problems to this. To highlight just one of the most obvious, we use the Laffer curve that was established during the Reagan administration. What the Laffer curve shows is that when taxes get too high, collection of taxes become harder to do. As we continue to raise taxes on the wealthiest bracket of this country, there will be increased efforts of “tax restructuring” (legalized tax evasion) in order for these people to avoid paying this increased taxation. We have seen this over and over again throughout history. What will end up happening is that the middle and lower classes of income will end up suffering from petty charges of tax evasion in order to fill the gap created by the missing taxes from the highest bracket. Another effort done by the US treasury to increase tax collection is to target cryptocurrencies. While this could possibly be a good chance to collect tax revenue, the efforts are absolutely futile due to the nature of a DECENTRALIZED currency.
So what happens now as the US treasury continues to expand their budget with no ways of structuring and financing their debt? The money is already in issuance from the fed and supplied to the US treasury with almost no backing. What will happen inevitably is the erosion of the US dollar. When the fed raises rates in an effort to control inflation (to bring down the price levels), it becomes harder for people to borrow. As we discussed previously, this is an effort for people to save. It would be effective, only if people had money left over to save after their finite cash (no continuous employment to replenish income balances, therefore cash balances are finite) has been spent on these extremely high price levels coming from a supply chain shock (as described before, resulting from a decrease of labor and initial drop in aggregate demand). As federal interest rates increase, bond markets typically follow the same pattern due to people not having cash on hand to invest in the bond market (no more loans to take on). With this happening, overall bond rates (especially long term bonds, because they require seizure of capital for a longer period of time) to skyrocket, due to falling bond prices. This is what the government plans on anyways, because they are under the assumption that as US bond yields increase significantly, there will be an increased effort to buy from the public (and international buying), decreasing Net Capital Outflow. The flaws in this thought process arise from the fact that as US bond yields skyrocket, so will international bond yields due to our federal interest rates impacting the decisions of the central banks around the world to tighten their fiscal policy as well (as we have seen over and over). There will be, however, a point where incentive builds to buy treasury bonds once interest rates rise, but the problem is that it will be at an interest that is exuberantly high, and calamitous for future generations (as we have already established bond payments are burdened by future generations’ taxes). In the meantime, though, as the US treasury continues to look for bond holders with an increased influx of cash capital into the economy (from increased debt budgeting), the US dollar depreciates due to decreasing real exchange rates (will be cheaper to buy US dollar initially, as monetary supply cannot be tightened with bond purchases). This will continue to erode the finite income the consumer possesses, and this erosion will be spontaneously occurring while price levels stay the same (due to PPI levels becoming stagnant as producers try to offset their excess costs of material goods to the consumers). The overall consumer will have an exponentially decaying purchasing power. When this happens, producers finally have to start decreasing their price levels, gapping total real GDP even further down (due to labor shortage and lack of total production). This is when markets only start to collapse. The rest of the collapse occurs in the speculative markets.
As we saw in 2000, the dot com bubble became compiled of the most extravagant, high forward P/E ratioed sectors in the entire market. And then it popped and created the recession of 2001. But where exactly did this over-speculative behavior arise from? Fiscal policy easing, allowing for more people being able to secure loans at cheaper rates- similar to what we see now. The internet, as we now use it, is one of the most fundamental and important characteristics of human technology. However, when it first became popularized, there was too much hope with no product. Why? Because people had the money to do so. This is similar to the speculative markets of today. With the ongoing and increasing interest in the ESG sectors of the market (along with the prospective crypto, and metaverse markets), humans are starting to put a lot of eggs into one specific basket. This basket, while having very high potential for future equity production, is still considered to be a liability heavy investment. The reason is most of the products that are derived from this specific market are technological advancements for the future, which are also very cost heavy. These projects are similar to the proposals the dot com bubble presented. The problem with these projects are people start to “count their chickens before they hatch”. What this means is that people are continuing to dump billions of dollars into these industries with the speculation that people will BUY their products at, not only a continuous, but expanding rate. This is what we call a forward Price to Earnings ratio (Forward P/E, as mentioned before). When these rates start to rise significantly, there are very high expectations. For example, the current P/E ratio for Tesla Motors is 120. This means that people are expecting production profits to rise 120 times the current price levels. Tesla is currently a Trillion-dollar company, one of the few in the US equities market. They are bigger than every major American automotive company COMBINED. Their production, however, is below all of theirs. Another company similar to this? Rivian Electric Truck company. Their current market capitalization stands at $100+ Billion. How many trucks have they produced/sold? less than 100. As alluding to the dot com bubble, it is not to say that these markets do not have a lot of prospect for the future. However, what we are creating is a bottlenecked effect, where heavy liability investment on-taking cannot be converted into assets as fast as they are projected to be. As we mentioned before with the decaying total income of the US consumer, the conversion of these liabilities into assets in the near future become not only improbably, but IMPOSSIBLE. The US equities market will be brought down with the breakdown of the speculative markets (which are categorized as “growth” stocks), as they are the heaviest unit of the overall market. This breakdown will be synonymous with the overall decay in consumption (aggregate demand), real income, and aggregate supply (in short run and long run). This recession we are facing will be calamitous and the damage created by such a meltdown may be absolutely uncontainable.
So what do we do now? The US will have a few options, but the most likely is we will go to war to create more stimulus to spend in the economy and create new jobs. This is the trend we have seen over and over again following a major recession because it has been historically proven to work. War will ALWAYS make money. Who we go to war with will not be of question for the consumer, rather when we go to war will be the bigger question. Threats have already been initiated with the debate over Taiwan with China, or the opposition with Russia over Ukraine not being allowed to join NATO. What we are doing is baiting these countries to initiate the fight (throw the first punch) so we can rile up the nation and claim “patriotism” as the defense for this conflict. But we will not focus on the political side of this debate, we rather focus on the economic effects.
As the speculative markets erode, people will become more conservative with their capital and the cyclical sector of the market will be propelled. Especially with higher interest rates, banks will prosper (until people begin to default on their unaffordable loans secured before the rate hikes. People will become more active in the options market (as options allow a way for consumers to hedge total risk on the underlying asset, and will become panicked to try to convert their cash capital into commodities, including speculative commodities such as cryptocurrencies. As we start to continue to propagate war threats, defense sectors will be boosted by potential of increased interest in defense spending. The job market will start to collapse in on itself and total aggregate demand decreases, and producers have to decrease total production even further than it already was. Fraud and crime rates will continue to increase (at a even higher rate than it has been during the pandemic) due to social pressures of bringing in real income. Health care sectors may rally due to ongoing variants being created (due to viral evolution) on the Covid virus. However, as herd immunity increases, the infection curve will threshold and decay out (given the variant is not too detrimental, in terms of new spike proteins, to overall antibody capacity of population). This will allow transportation to start increasing again.
Again, this is just an opinionated journal. However, this journal has been backed by facts and principles of mathematics and economics. Take it for what it is worth. I hope it was worth the read.