Economic Outlook
Visualizing Biden’s Budget Proposal for 2022
On April 9th, President Joe Biden released his first budget proposal plan for the 2022 fiscal year.
The $1.52 trillion discretionary budget proposes boosts in funding that would help combat climate change, support disease control, and subsidize social programs.
This graphic outlines some key takeaways from Biden’s budget proposal plan and highlights how funds could be allocated in the next fiscal year.
U.S. Federal Budget 101
Before diving into the proposal’s key takeaways, it’s worth taking a step back to cover the basics around the U.S. federal budget process, for those who aren’t familiar.
Each year, the president of the U.S. is required to present a federal budget proposal to Congress. It’s usually submitted each February, but this year’s proposal has been delayed due to alleged issues with the previous administration during the handover of office.
Biden’s publicized budget only includes discretionary spending for now—a full budget that includes mandatory spending is expected to be released in the next few months.
Key Takeaways From Biden’s Budget Proposal
Overall, Biden’s proposed budget would increase funds for a majority of cabinet departments. This is a drastic pivot from last year’s proposal, which was focused on budget cuts.
Here’s a look at some of the biggest departmental changes, and their proposed spending for 2022: Read More
Nearly 1.5m companies are incorporated in Delaware. How did this tiny state become a mecca for corporate activity?
Take a look at any given corporation’s registration docs, and there’s a good shot you’ll see the address 1209 North Orange Street.
Spanning less than a city block in Wilmington, Delaware, this nondescript office building is the official incorporation address of 285k+ companies from all over the world.
On the surface, there’s no reason that Delaware — home to blue hens and Civil War monuments — should be a corporate paradise. It’s the second smallest state in America, and the 6th least populous, with just 986k residents.
Yet, nearly 1.5m businesses from all over the world are incorporated there, including 68% of all Fortune 500 firms.
The Delaware Loophole and how it works
Right after the show at 10:05am pacific time, Michael’s guest Plurilock CEO Ian Paterson will host a live webinar and share an insider’s view of how our institutions, our companies, and our own data are at risk. Ian will also offer his perspective on local and global demands for cybersecurity services. Most importantly, he will identify the key drivers in this important sector as investors consider portfolio allocations.
Following the presentation, Ian will engage in live Q&A and update investors on Plurilock’s recent US expansion. CLICK HERE to register
Many people from different sectors have been approaching me lately and raising concerns about the recent privacy changes led by Apple and Google.
To sum it up in one word: “PANIC”, and in two words: “DON’T PANIC”. As always with change, there will be those who are impacted more and those who will be impacted less. As long as your business is prepared for the change, you should be fine.
For those of you not in our industry, Apple’s iOS 14.5, announced by Apple on its virtual WWDC in June 2020, presented a new App Tracking Transparency (ATT) policy requiring developers to ask for permission when they collect certain information (known as IDFA) from other companies’ apps and websites for advertising purposes.
This means advertisers will no longer be able to deliver personalized ads and track the effectiveness of their ad campaigns without users’ consent.
Google has taken it one step further, announcing on Jan 27, 2021 that they will stop measuring IDFA altogether.
These changes come in the midst of the precedents set by recent online privacy legislation like California’s CCPA and Europe’s GDPR, probably as an attempt to prevent additional government regulation.
For the average person, the end of the pixel tracking era may sound like the end of user data based marketing, but if you read between the lines, the implications for advertisers are limited for specific industries and probably for a limited time, until new methods of data collection and analysis will be widely implemented.
Who will be the winners and losers from this tectonic change:
- We expect Facebook Ad campaigns’ performance to decline, at least temporarily, due to the limited effectiveness of personalized advertising and the limited reporting of results moving forward. That being said, Facebook is making several changes to comply with iOS 14, so we expect numbers to bounce back in the near future.
- As a result, we expect advertisers to allocate more budgets towards Google, which seems to have suffered less from these changes, thanks to its ability to collect user data in other ways and to the wide reach of its own networks: Android, YouTube, Google Search, Analytics, Google Play and more.
Thanks to a more diversified ad network and less reliance on mobile ad revenue, Google isn’t as directly impacted by the new iOS policies and might even earn from Facebook’s loss. - While Google Search ad campaigns’ performance will probably not be affected, we expect interest-based targeting campaigns (Display, Discovery, YouTube) will experience a decline in performance due to the data lost. These types of campaigns are usually associated more with upper-funnel marketing, such as branding and awareness activities.
- Industries that rely heavily on IDFA, such as Gaming, gambling, and other App-related industries, will be impacted the most, especially those who target iOS apps and users.
Despite the present somewhat gloomy outlook for digital marketers, the future still seems bright:
- Initial data post the iOS 14 release indicates that over 70% of users are accepting data sharing. These stats are also supported by a study showing that 83% of consumers are willing to share their data if it means they’ll get a more personalized experience.
- The major online media networks have already taken actions to better ensure their users’ data privacy, allowing them to collect data and hopefully avoid any future issues from a user privacy perspective or further government regulation.
- We believe that privacy related legislation will not continue to be a major concern since public’s concerns around privacy are declining, according to GWI.
As for Adcore and our clients, we see these changes as a growth opportunity for our business. Our technologies are geared towards e-commerce and by such revolve more around Google Search and Shopping, which probably will not be affected significantly. If any, Adcore’s fast reaction to this change provides us and our clients with a competitive advantage.
Omri Brill, CEO of Adcore is a computer scientist, industrial engineer and leader in the digital advertising sphere. Adcore trades on the TSX under the symbol ADCO.
As the economy shut down in March of last year due to the pandemic, the Federal Reserve flooded the system with liquidity. At the same time, Congress passed a massive fiscal stimulus bill that extended Unemployment Benefits by $600 per week and sent $1200 checks directly to households.
In December, Congress passed another $900 stimulus bill extending unemployment benefits at a reduced amount of $300 per week, plus sending $600 checks to households once again.
Now, the latest iteration of Government largesse comes in a solely Democrat supported $1.9 trillion “spend-fest.” Out of the total, only about $900 billion goes to consumers in the form of $400 extended unemployment benefits and $1400 checks directly to households. The remaining $1.1 trillion will have little economic value as bailing out municipalities and funding pet projects doesn’t boost consumption.
Economists estimate the latest stimulus bill could add nearly $1 trillion to nominal growth (before inflation) during 2021. While such a surge in growth would be welcome, it represents just $0.50 of growth for each dollar of new debt.
Such a high growth estimate also assumes that individuals will quickly spend their checks in the economy. The hope is that as vaccines become available, individuals will unleash their “pent-up” demand from the last year.
While that could indeed be the case, there are also other facts to consider.
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