US tax reforms: the big picture
Stratfor expects that the recent US tax reforms will boost the US economy for years to come, especially as US corporations repatriate many of the funds they hold overseas. Currently about a trillion USD are held overseas by US companies - over 60% of the savings belong to technology companies and close to 20% to pharmaceutical companies. Tax cuts provided as a part of the reform will also boost the economy, but this will lead to the Federal deficit growing from 77% to 85% of GDP by 2021, resulting in a (modest) increase in interest rates. An 85% debt-to-GDP ratio will be high by historical US standards, but compared to some other advanced economies, it remains fairly low. Over the next few years, Stratfor expects the US economy to grow at an accelerated rate (possibly event at 4% pa) due to the US leadership in the field of ‘Artificial Intelligence’ technologies, which we prefer to refer to as Animated Smart Matter.