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An Economic Renaissance Is About To Begin

An Economic Renaissance Is About to Begin

An Economic Renaissance Is About to Begin

Chris’ note: Stocks have been tumbling this week. But Teeka Tiwari analyst Andrew Packer says one sector will buck the bearish trend. It’s all down to a multitrillion-dollar money gusher out of Washington that’s designed to bring manufacturing jobs home. And Andrew says it will have a multiplier effect on the economy… and send one sector soaring. So if you’re looking for a way to beat the coming recession, you should put this sector at the top of your list. In was summer of 1919… The U.S. military tasked a 28-year-old Army Motor Transport Corps colonel to send the first “truck train” across the United States. Light and heavy motor trucks, touring cars, observation cars, motorcycles, ambulances, and tractor trailers made up the convoy. And it took 62 days to cover 3,251 miles from Washington, D.C., to San Francisco, California. That works out to about 52 miles a day. And it’s no wonder. Practically all roads from Illinois through Nevada were little more than dirt tracks. Wooden bridges broke. Dust was a constant problem. 1919 Transcontinental Convoy But the colonel completed his assignment. And over the years, he’d conquer many more – including the liberation of Europe in the mid-1940s. The leader of that 1919 convoy – Dwight D. Eisenhower. Thirty-seven years later, President Eisenhower signed into law the 1956 Federal Highway Act. It resulted in the construction of multilane highway system crisscrossing the country. Government engineers designed the interstate system to avoid the issues Eisenhower faced during his 1919 convoy. Washington covered 90% of the costs – that’s about $273 billion in today’s dollars. Local cities and counties were responsible for the remaining 10%. The work took 36 years to finish. The government didn’t declare the U.S. highway system complete until 1992. And it helped kick off an economic boom… Bullish Trend Without the highway system, U.S. GDP today would drop by $619 billion – or about 2.6%. That’s going by figures from the National Bureau of Economic Research. That may not sound like a lot… But a 2.6% drop in GDP would throw the country into a recession. So, it’s no surprise the money flowing into the economy via the Federal Highway Act kicked off a boom. Investors largely avoided stocks going into the 1950s. But after the signing of the Federal Highway Act, the Dow entered a 10-year bull market. Between 1956 and 1966, it topped 1,000 points for the first time. I’m not saying the Federal Highway Act was the only driver for the 1950s bull market. But the hundreds of billions of dollars it pumped into the U.S. economy helped fuel the boom. Figures from the American Road & Transportation Builders Association, a trade organization, show interstate highway system played a major role in the nation’s 533% GDP growth over the past six decades. In 2020, it carried nearly 75% of U.S. truck freight. Also, millions of vacationers and tourists travel along our interstate highways every year. And despite the COVID-19 pandemic, tourism accounted for $1.1 trillion of U.S. GDP in 2020. So about 5.2%. And just as the Federal Highway Act did in 1950, today’s spending spree will lead to an economic renaissance. Made in America Again The trend I’m talking about is the reshoring of U.S. manufacturing. It’s the process of returning production and manufacturing back home. As the reshoring trend unfolds, we’ll see hundreds of thousands of jobs come back to America. My colleague Teeka Tiwari calls this trend “Made in America Again.” That’s because it will unleash an estimated $1.6 trillion into the economy. That’s based on four new federal laws that have passed over the past two years… The Investments and Infrastructure Act – It sets aside $1.2 trillion to build U.S. infrastructure for a new generation of industrial facilities CHIPS and Science Act – This $52.7 billion bill focuses on ensuring the U.S. reclaims its lead in semiconductor design Inflation Reduction Act – This provides $250 billion for clean energy technologies and new state-of-the-art factories for building them COMPETES/United States Innovation and Competition Act – This sets aside $51.5 billion for increasing U.S. production and reducing supply chain vulnerabilities Now, I know billions of dollars of government spending isn’t what everybody wants right now. And I know some folks think all government spending is bad all the time. But this spending depends on private-sector companies completing specific projects through government contracts. And regardless of your politics, that could lead to massive returns for companies on the receiving end […]

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Daisie Hobson

Daisie Hobson is a Director at the Reshoring Institute and an engineer with many years of experience in manufacturing and project management.

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