US (1960-2100) If Things are so Great, Why is Hardship in the US Increasing?

 

Measurable Hardship in the US (graphic above), is increasing and projected to increase until 2025. If US economic performance is so great, why is this happening? And, why does Hardship decrease after 2025 in the estimated model (see the Boiler Plate) above?

Quantitative Counterfactual Analysis indicates that impacts from growth in the World System are driving Hardship in the US. Decline in Hardship after 2025 is the effect of slowing growth in the World System. In other words, Growth in the World System has increased Hardship in the US even though the US is the Hegemonic leader of the World-System.

Part of the reason is that the current US Administration (Trump II) is cutting benefits for SNAP (Food Stamps) and other US Welfare programs. Why "millions of Americans" have to be on food assistance in the first place is a question that bothers me and the answer has to do with World-System forces.

The graphic at the beginning of this post is a forecast driven by outputs from the WL20 model. To determine the effect of World System forces, we can rerun the forecast with the BAU model (no input from the World System).

The BAU model shows Hardship reaching a high-level plateau after 2100. The Trump II Administration's actions to withdraw from the World-System and their attempts to cut US Welfare programs is an attempt to bring this Hardship Future into being. Increasing Hardship in the US was one of the prices of Hegemonic Leadership. 

The peak and decline of the World System would benefit the US if it still stays connected to the World-System. High levels of Hardship and World-System isolation are possibly a benefit to some elements of the US Right-Wing elite, but not most of the US Public. The Hardship Future will likely also be one of Conflict and Chaos--another potential benefit to the Right-Wing.

You can experiment yourself with the USL20 Hardship model here. For comparison, the System Matrices for the the USL20 Hardship model with World Input are presented in the Notes. Bootstrap 98% Confidence intervals for coefficients in the Systems Matrix (F) are provided in the code. Both models are stable.

Is there anything in the US Economy that controls Hardship or is it primarily driven by World System conditions? Economic theory doesn't have much (or anything) to say about Hardship. Controlling Hardship is essentially a Political Systems problem (among a lot of there things here), but current Neoliberal Ideology seems to rely on Economic growth to resolve all problems. In a future post, I'll investigate the topic of what (if anything) controls Hardship.

Notes

Hardship Index

The following indicators (from Shefner,  Roland and Pasdirtz, 2015) were used to construct the HARD (Hardship) Index. All data were taken from the World Development Indicators (WDI).

In addition to HARD1, two other indexes were constructed, HARD2 (dominated by Unemployment) and HARD3 (dominated by Inflation). Each index explained another 10% (0.841% and  0.933%, respectively) in the indicators. So, indeed, Unemployment and Inflation were important components of US Hardship, but the other indicators also played a role. Whether the US Electorate made a good choice in electing the TRUMP II administration to resolve their issues with hardship will have to wait and be seen over the next four years.

The Measurement Models for the WL20 Index and the US_HARD index are presented above. The time series forecast plots are presented below. The WL20 index first:

Growth in the World System (W1) peaks in 2040 and is forecast to decline after that. The Food-Market Index (W2=(LP+P.Wheat.-TEMP) declines throughout the period because Global Temperature is increasing and the Oil- Market-Environmental Index (W3=(P.OIL+P.WHEAT-OIL-EF-Earths) increases to a plateau in 2075.

And the the WL20 HARD index:

 

Overal Hardship (W1) increases through the period while W2 (Unemployment) and W3 (Poverty) are cyclical.

World-System (1970-2100) World Population Collapse

October 27, 2025. NPR ran a segment on how Populations are Shrinking and Altering the Global Economy. It is somewhat surprising that Population Decline has not been bigger news. It has been going on in many countries and for the entire World System (graphic above with 98% bootstrap prediction intervals).

The United Nations has essentially been making Population projects (graphic above) similar to my WL20 Model at the start of this post.

The basic theoretical model underlying the possible impact of Population Decline is the Kaya Identity (above) used by the IPCC to help understand Global Temperature Change. The Kaya Identity is true by definition (see the Boiler Plate) so any decrease in Population will not only decrease economic growth (Q) but also decrease CO2 emissions and moderate Global Temperature (T).

My models are also predicting that growth in the World System will peak before 2100 (here) as will Global Temperature (here). The reasons are that there are powerful negative feedback loops from environmental and market controllers that eventually limit growth of the World System. 

Exercises

You can experiment yourself with one of my World System models here. The models are written in the R programming language and can be run on line. Suggestions in the code, to include bootstrap confidence intervals for choosing reasonable counterfactuals, can be found in the code. The model is stable and cyclical.

Another one of my World Systems models is unstable and produces exponential growth forever (here). When it is stabilized (instructions in the code) the World System reaches a steady state after 2100.

The future could be any one of these models or something else entirely (see the Boiler Plate for IPCC Emission Scenarios). You have to ask yourself which one of the models (if any) seem reasonable.