Subject: Finance and Accounting
Topic: PREDICTION OF FUTURE TRENDS
Language: English (U.S.)
Pages: 4
Instructions
Research on the future trend in the field of Economics

Economic Issues/ Trends in 2021

According to Davies and Harrigan (2012), the United States will be like Greece by 2021 in terms of staggering national debt. The authors cite that the Congressional Budget Office has been inaccurately forecasting the country’s economic outlook for the past 16 or so years. The inaccuracy in the agency’s economic predictions stems from the fact that its forecasts are taken out in a limited context. For instance, the country’s federal debt was at $16 trillion in 2012 while the CBO had predicted that the country’s debt would be at the $7.6 trillion mark. 

The CBO predicted that the country’s federal debt would be at $25 trillion by the year 2021. Going by current events, this prediction is too far off. Most experts predict that the country will have a federal debt of more than $35 trillion by then. The CBO has a good record of accomplishment in predicting the country’s gross domestic product. The organization estimates that the country’s GDP will have exceeded $24 trillion by 2021 (Davies and Harrigan, 2012). 

Therefore, if in 2021, the country’s debt has reached the $35 trillion mark and its GDP will be at $24 trillion then the country’s debt will be 150% of her GDP in 2021. The authors also estimate that the country will pay $1 trillion in interest by 2021, a sum larger than the country’s current national defense budget and Social Security expenses. Paying this large amount of interest in 2021 will devour almost a third of the country’s federal tax revenues. This is exactly where Greece has been over the past few years.

The Trans-Pacific Partnership could also lead U.S. to become like Greece by 2021. The U.S. began to have large trade deficits in the 1990s due to the Asian financial crisis. During this time, the Asiatic countries would purchase large amounts of dollars so as to prop the dollar against their currencies. This would ensure that the value of their exports to the US would increase. Some countries including China are still conducting the practice of propping the dollar’s value against their own currency to boost exports (Baker, 2015). 

The TPP does not have any references to currency in the original agreement. This will make it difficult for the country to protect itself from the propping up of the dollar and lead to even greater trade deficits. These deficits are the main reason behind secular stagnation that has even prevented full employment in the economy. 

Political/Legal Issues and Trends in 2021

It is estimated that by 2021, global political power will shift from the West to the Asian countries. This shift in the balance of power is due to the strengthening of the economies of the Asian countries, especially China. China is now seen as a world super power and its currency and production rates have ripple effects on the entire globe’s economy. 

With the increase in economic power of Asiatic countries, their military power will also increase. China’s annual national budget shows a steady increase for defense expenditure, despite the fact that the country has not participated in any conflict since the early 1990s. The country’s budgetary expense on defense and militarization had reached a whopping $160 billion in 2010, which was a 6.5% increase from the previous year. The defense budget covers electronic and cyber warfare, insurgency in war zones, terrorism by individuals rather than states, as well as increased conflict over shipping lanes in the South China Sea and the Indian Ocean. The estimated contribution to global GDP of the militarization of the countries in Asia will be at $1 trillion by 2020. 

This increased allocation of a government’s resources on defense will lead to other countries in the region setting aside bigger portions of their GDP to defense. Therefore, by 2021, the Asiatic countries could be the strongest military force in the world. We all know that military strength is coupled with political dominance. As such, we can expect that China and her fellow Asiatic countries will have a lot of influence on the political landscape of the world by 2021, even more influence than the U.S., Russia, and Britain. 

In addition, the power shift to the Asiatic countries is unique in the history of power shifts. These are very populous countries with strong nationalistic persuasions at a time when the power of nationality seems to be waning. These countries are also seeking redress of past grievances especially targeted towards the Western nations. There are also several flashpoints in the Asiatic sphere that could escalate into full-scale wars. These areas include Kashmir, the Korean Peninsula, and Taiwan. The waning power of nationality in the West will be a hindrance to the West’s adaptability to the on-going promise of conflict in the region (Hoge, 2004). 

To make the situation even worse for Western nations, China has changed its foreign policy stance on relationships with these countries. According to Engdahl (2015), China no longer holds its relationship with the EU and the US as her highest priority. Rather, the country has created a new group of high priority countries including African nations and Russia. 


Social and Cultural Issues/Trends in 2021

Experts predict that by 2021, there will be genetically modified babies. Many scientists believe that the controversial genetic modification of babies can help in eliminating some of the inheritable maladies including epilepsy, blindness, and diabetes, as well a myriad of inheritable psychological disorders. It so happens that bacteria carry out ‘germline editing’ in nature, using enzymes to locate unwanted DNA and disposing of it. 

The premise behind genetically modified babies is that the inclusion of an additional set of female DNA can help remove some of the mutations in DNA that result in babies being born with deficiencies and diseases. By genetically snipping out the unwanted DNA inside babies before they are born can make babies more HIV resistant as well as reduce the instances of inherited diseases being carried down a generation. Animals such as pigs and cows are already being born genetically modified in order to breed more resistant breeds (Brueck, 2015). 

It is estimated that more than ten thousand women have mitochondrial DNA with mutations. These women pass these dangerous mutations to their fetuses. Since it is only women who pass on mitochondrial mutations down to the children, it is possible to eradicate these mutations by using DNA from three persons to modify the child’s DNA and remove the harmful mutations. These individuals will be one man and two women who give their DNA to the child (Paolantonio, 2014).

One of society’s greatest concerns with genetically modifying a fetus’s DNA is that people can use this method to create new races of human beings who have the desired genetic characteristics such as higher intelligence, strength, and beauty. Another social concern is that genetically modifying babies alters the entire species. Babies who have been genetically modified will have inherited genetic material from both women. These genes will now be passed down the ‘germline’, once the GM babies give birth, leaving it permanently altered along the maternal line. This alteration will result in the permanent disruption of our species’ genetic make-up. 



Technology Issues/Trends in 2021

The biggest technological prediction for 2021 is the rise of self-driving cars and the car-sharing revolution. Due to the expensive nature of their component parts, it is most likely that average customers will not be able to afford to purchase these autonomous vehicles. However, big businesses, especially the taxi and ride sharing services, will be the target of these AVs (Tal, 2015). 

In most taxi and car sharing businesses, the greatest cost is the salary paid to the driver (about 75% of total revenue). If the driver is removed from the equation, then the cost of using a ride sharing service such as Uber is significantly lowered. In fact, using the ride sharing service will be less expensive than owning a vehicle. Furthermore, if the autonomous vehicles were electric then it would reduce the cost of the service even further (Tal, 2015). 

A cycle will then develop whereby commuters would rather use the Uber service than their own cars owing to the lowered costs of transportation. Some people will even sell their cars after a few months’ time. The more people who use the taxi service, the greater demand for the company’s services. Greater demand will force the company to invest even more on electric AVs so that the company has a greater fleet to meet the rise in demand. The process can continue over the years until finally most of the cars in urban areas are autonomous and electric and owned by Uber and other competitors such as Google, and Apple.

At a macro-environmental level, the more people using the automated car sharing services, the less cars that will be on the roads. This will translate to lesser traffic, faster arrival times, and better yet, less amount of pollution to the environment. There will also be fewer accidents thus saving the society a lot of cash as well as productive labor in form of lives. The automated car sharing vehicles will also give the disabled and the elderly more mobility increasing their quality of life.  

In 2021, we should expect to see global companies clambering for supremacy in the ridesharing wars. Several competitors are poised to lead the world into electronic autonomous driving. These companies include Uber, Apple, Google, and auto manufacturers such as Toyota and GM. The tech companies mentioned have market capitalizations above $10 billion today and this is expected to increase significantly by the time 2021 rolls in. Uber will be a strong competitor because it has several years of experience in the ridesharing service. It also has a market cap of $18 billion enabling it to be able to purchase fleets of electronic autonomous vehicles. 

However, the company is dependent on Google for the maps and auto manufacturers to produce the automated cars. On the other hand, Google has a market capitalization of more than $350 billion meaning it will be easy for the company to purchase even more fleets of autonomous vehicles. In addition, the company runs the most profitable online advertisement business in the world. Uber’s ad serving expertise will never be a match for Google. 


References

Baker, D. (2015, Sept 2). Will the Unites States End up like Greece? The Risks of Trans-Pacific Partnership. Huffpost Business. Retrieved on 17/2/2016 from http://www.huffingtonpost.com/dean-baker/will-the-united-states-en_b_6649252.html 

Brueck, H. (2015, Dec 2). Are you ready for genetically modified babies? Fortune. Retrieved on 17/2/2016 from http://fortune.com/2015/12/02/genetically-modified-babies/ 

Davies, A., & Harrigan, J.R. (2012, Sept 6). Debt Forecast: U.S. will look like Greece by 2021. MarketWatch. Retrieved on 17/2/2016 from http://www.marketwatch.com/story/debt-forecast-us-will-look-like-greece-by-2021-2012-09-06

Engdahl, W.F. (2015, Jan 6). China’s Global Political Shift. Global Research. Retrieved on 17/2/2016 from http://www.globalresearch.ca/chinas-global-political-shift/5424967 

Hoge, Jr, J.F. (2004). A Global Power Shift in the Making. Foreign Affairs. Retrieved on 17/2/2016 from https://www.foreignaffairs.com/articles/united-states/2004-07-01/global-power-shift-making 

Paoloantonio, M. (2014, Apr 7). Genetically modified babies. QuantamRun. Retrieved on 17/2/2016 from http://www.quantumrun.com/article/genetically-modified-babies

Tal, D. (2015, Jul 8). Prediction| The Big Business Future Behind Self-Driving Cars: Future of transportation P2. QuantamRun. Retrieved on 17/2/2016 from http://www.quantumrun.com/prediction/big-business-future-behind-self-driving-cars-future-transportation-p2