"Spending money" again! Biden proposes a $6 trillion plan...

Cross-border sellers are in tears: "Biden should stop throwing money around and do something real !"

It is reported that US President Biden submitted a detailed draft of the national budget for fiscal year 2022 to Congress . He plans to increase public spending nearly four times to 6 trillion US dollars. Once the news came out, the American people's concerns about inflation became very serious.

Many American economists have warned that this move will raise prices across the country and that the United States faces an extremely high risk of inflation.

After witnessing a series of money distribution plans in the United States, I believe that the initial joy of the majority of sellers has slowly turned into worry: Money is being distributed again, should I still do my cross-border business?

On the one hand, there is a steady stream of US money distribution plans, and on the other hand, there is the booming cross-border e-commerce. According to the US Department of Commerce, US e-commerce accounted for 13.4% of total retail spending in the first quarter of 2021, and US e-commerce has reached a market share level that can only be achieved in 2022.

Here it comes again! Biden submits $6 trillion "spending money" plan

According to foreign media reports, US President Biden will announce a budget requiring the federal government to spend 6 trillion yuan in fiscal 2022 and 8.2 trillion yuan in fiscal 2031, which will bring federal spending to the highest level since World War II and increase the annual deficit to more than 1.3 trillion yuan over the next 10 years.

In this budget, the Biden administration plans to set aside $1.52 trillion in discretionary spending for military and domestic affairs; another $1.8 trillion for American family programs; and the previously announced $2.3 trillion American jobs plan will focus on investing in infrastructure construction, and the plan is currently being put into bipartisan negotiations in Congress.

The proposal calls for a 41% increase in the Department of Education budget over last year , a 23% increase in the Department of Health and Human Services, and a 22% increase in the Environmental Protection Agency. Biden's budget also includes a series of tax law reforms.

The White House says the reforms could fund trillions of dollars in U.S. domestic spending plans. Chief among them is an increase in the corporate tax rate to 28 percent from 21 percent, as well as increased IRS enforcement and higher taxes on the wealthiest taxpayers.

US economists warn: The United States faces extremely high inflation risks

According to the White House's plan, changes in tax laws and tax enforcement will increase additional revenue. Although the Biden administration plans to offset huge expenditures by raising taxes on businesses and the wealthy, the budget has still been subject to a lot of questioning and criticism . Problems such as debt and inflation may become a focus of concern for the American people .

According to US media reports, if the Biden plan is implemented, total US fiscal spending will continue to rise over the next 10 years, increasing the deficit by at least $1.3 trillion each year and reaching $8.2 trillion by 2031. Federal debt will also reach a record level, exceeding the size of the entire US economy .

Many economists have also warned that the United States' latest money-spending plan will raise prices across the country . The United States is facing an extremely high risk of inflation . If Biden does not control spending, the situation in the future may be worse .

Before the latest U.S. money plan came out, there were studies showing that as the economy reopens after the COVID-19 crisis, more and more Americans expect inflation to rise in the coming years. Overall, according to the New York Federal Reserve's consumer expectations survey, inflation is expected to be as high as 3.4% in a year , the highest level since September 2013.

According to the latest U.S. consumer price index (CPI) released in April, the U.S. has recorded the largest increase since 2009, with an increase of 4.2%, which has forced the Federal Reserve to raise interest rates to curb the continued rise in the consumer price index. Data released by the U.S. Treasury Department recently showed that in the first seven months of fiscal year 2021, the U.S. federal budget deficit hit a new high, breaking through the previous $1.5 trillion mark and reaching a new high of $1.9 trillion.

According to statistics from the U.S. Department of Commerce, the U.S. personal consumption expenditure (PCE) price index rose 3.6% year-on-year in April, exceeding the expected value of 3.5% and significantly exceeding the previous value of 2.3%. This is the fastest growth rate of the inflation indicator since 2008, far higher than the Federal Reserve's official inflation target of 2%.

The rise in prices in the United States is also particularly evident in rents. According to a report by Realtor.com cited by the Wall Street Journal , the median monthly rent in the 50 largest housing markets in the United States rose 1.1% year-on-year to $1,463 per month in March. This is also the first time that the growth rate of rents has accelerated since last summer.

U.S. unemployment hits record high in April

On the one hand, there are rising prices, and on the other hand, there is a soaring unemployment rate. According to data released by the U.S. Department of Labor, the U.S. unemployment rate rose by 0.1 percentage point month-on-month to 6.1% in April , and the number of new jobs in the non-agricultural sector was 266,000, far lower than the 770,000 in the previous month and the market's general expectation of 1 million.

The above data show that the labor shortage has continued to plague the continued recovery of the US job market over the past period of time . At the same time, some companies are also facing problems such as supply chain disruptions, which have brought difficulties to job growth and may further inhibit the US economic recovery in the coming months.

But the U.S. labor shortage may be about to ease. It is understood that as Americans increasingly worry that federal payments will prevent people from returning to work , nearly half of the U.S. states will end the $300 enhanced unemployment benefits early, some in June and some in July.

In order to attract people to work, some states in the United States also pay people bonuses to return to work.

If you don't work, you won't get any subsidies. If you work, you can earn money and get subsidies. I believe that with the stimulation of a series of US policies, the US employment rate will increase. In this way, life will be much better for cross-border sellers.

U.S. e-commerce hits record growth

While the U.S. unemployment rate may be easing, U.S. e-commerce is also moving in a positive direction.

According to the U.S. Department of Commerce, U.S. e - commerce accounted for 13.4% of total retail spending in the first quarter of 2021 , reaching a market share level that will not be achieved until 2022. Before the pandemic , the estimated figure was only 12.3% , and it was the pandemic that enabled U.S. e-commerce to achieve record growth.

In the early days of the pandemic, the decline in overall U.S. retail spending led to a sharp increase in e-commerce penetration. Now that retail spending has slowly recovered, the fact that U.S. e-commerce can still achieve such good results in the first quarter of 2021 sends a positive signal.

Foreign media said that in 2021 and beyond, e-commerce penetration will not decline, but will continue to grow at the current level. After sales reached nearly $800 billion in 2020, it will exceed $1 trillion as early as 2022 - a figure that will not be achieved until at least 2024.

The US economy is still a mixture of sugar and glass, which means that in the future, cross-border sellers will continue to face both opportunities and challenges.