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(CNN) - Tariffs and the trade war with China are the biggest short-term financial problems facing the United States. But an expert in the market believes that the US You must focus on a longer-term problem if you want to stay on top of the global economic heap: immigration.
David Kelly, chief global strategist at JPMorgan Funds, argued in his most recent weekly report that the United States could soon face a great shortage of labor as more baby boomers reach retirement age. There are currently not enough younger people to replace them.
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He said that many people, including members of the Trump administration, are focusing too much on trying to find ways to stimulate greater demand through tax cuts and asks the Federal Reserve to lower interest rates.
But Kelly believes that the biggest problem ahead for the United States is the supply of people in the country who are of working age and can continue to spend.
Unless the United States adds more young people to the workforce, Kelly argues that any tax reduction or other stimulus would be "more useless than a fast car in a big city."
"There is an obsession with how to stimulate demand, with fiscal policy, monetary policy and monetary policy deployed to accelerate the economic engine," Kelly wrote. "However, the United States faces a demographic bump and, unless we fill it, the growth will be mediocre, at best, regardless of how we try to fan the demand."
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Kelly recommended some short-term solutions to help fill the demographic bump. He suggested making three-year undergraduate university degrees more available to students and delaying the eligibility of Medicare benefits for retirees by one year until the age of 66.
But those proposals would also be controversial. That is why boosting immigration makes more sense.
Kelly noted that the number of immigrant visas issued by the United States so far this year has continued to decline after the declines in 2017 and 2018. That is not a good sign for the US economy, especially since the vast majority of immigrants coming to the United States The states have an optimal working age.
“The pace of immigration will be key to the pace of economic growth. Simply put, unless the US UU. Increase immigration, even maintaining real GDP growth of 2% over the next decade will be a challenge, ”Kelly wrote.
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Kelly admitted that the United States needs to do a better job to address the issue of illegal immigration. But taking strong action against all immigrants is also not the answer, he argues.
“This is, of course, a controversial idea at a time when illegal immigration is a politically charged issue in the United States. But, although a solution to the problems caused by illegal immigration is urgently needed, it should not obscure the benefits that the United States has received from immigration in the past, ”Kelly wrote.
Economy Immigration