On this website, It Does Not Add Up,I mostly talk about the major problems facing the United States and how I usually think things will work out well for us.  In other words, I am an optimist about our future.

Of course, we do have problems to be concerned about.  Our national debt is huge and out of control.  We have several autocratic adversaries (China, Russia, Iran, North Korea) who want to diminish us.  We currently have monetary inflation that is causing substantial misery for many people.  In a sense, these are all pesky details of national life to be attended to.

But, a major change is taking place at the present time that will transform American society.  As the social analyst, Walter Mead, has described, society is right now undergoing a huge realignment, from the “car city” to the “cyber city.”  Up until about 1920 the “rail city” predominated.  It was then replaced by the car city and is now being replaced by the cyber city.

Until recently, most people thought that the car city was the highest form of urban living and that the Great (car) Migration would dominate our lives forever.  But since the pandemic started in 2020, work-from-home (WFH), has opened the door to a new kind of urban living and the shift from the car city to the cyber city appears to be a major upgrade.

Cities emerge from the interplay of geography and technology.  To start with, railroads allowed cities to reach an unprecedented level of concentration, drawing many millions of people from the hinterlands into urban life by commute.  But then, car cities replaced rail cities in the early twentieth century.  Suburban living and single-family home ownership increased greatly because workers could commute from a much wider area.

The post-WWII flight to the suburbs helped create a new kind of American city as the descendants of ethnic immigrants moved to the suburbs and intermarried.  Many leading trends in American politics are rooted in the contest between the old rail cities and the postwar proliferation of car cities.  The center cities remain more hospitable to left-wing politics today than most suburbs.  The right, by contrast, remains instinctively pro-car and pro-suburb.

Now, tens of millions of American commuters are discovering that they can work from home (WFH).  This happened during the pandemic!  As of March 2024, more than 35 million Americans, close to one in four workers overall, were teleworking all or part of the time.  The rise of WFH threatens a massive dislocation in the life of the American city, a shift that is likely to be more far-reaching than the previous shift between rail and car cities.

WFH and the technologies that power it aren’t just breaking up the Great Migration.  They are opening the doors to a new era of middle-class prosperity that will make the zoomers rich. The real issue is geography as car cities approach their natural limits.   Density proponents want to address the resulting shortage of affordable housing by allowing denser building in existing neighborhoods.   WFH offers a much better path.

As happened after 1945, the wave of new infrastructure construction and new housing that WFH will unleash won’t just help the families who can move into new homes.  It will create millions of new jobs, enabling more workers to join the growing ranks of a rejuvenated American middle class.

Conclusion.  “America is one of a handful of countries well-positioned to lead the transition to a new kind of humane urbanism.  We have the space to expand, we have the growing population, and we have both the ingenuity and the energy to reimagine our cities and upgrade our society.  The age of American opportunity is not drawing toward a close.  It is moving toward renewal.”

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My website, It Does Not Add Up, has a very definite point of view.  Americans are blessed in many ways.  Democracy is the best form of government.  Free enterprise (capitalism) is the best form of economics.  We are both economically and militarily the strongest country in the world.  Our political and economic strength and freedom lead to steady social progress.  It is U.S. dominance that has created and preserved relative peace and stability in the world since the end of WWII.  It is critical for the current U.S.-led world order to continue.

But, nevertheless, we do have problems that we must be concerned about and take seriously.  We have internal political polarization, the worst in many years.  We have several autocratic rivals (China, Russia, Iran, and North Korea) who would like to weaken us.  As the analyst, Hal Brands, says in the current issue of Foreign Affairs, we have at times used amoral means to achieve our liberal goals.  Consider:

• During WWII, we firebombed many cities in Germany and Japan, as well as using atomic bombs against Japan, to defeat the Axis powers. We allied with Josef Stalin’s communist Russia to help us defeat Germany.
• During the Cold War, we allied with Mao Zedong’s communist China to isolate Russia, making it easier to overpower Russia, with our economic and military strength.
• The North Atlantic Treaty Organization, formed to protect democratic Europe from autocratic Russia, has several somewhat autocratic (i.e. barely democratic) members, such as Hungary and Turkey.
• In the Middle East, our democratic ally Israel is at war with Hamas (in Gaza), one of several proxies of terrorist, autocratic Iran. In this conflict, we have two autocratic allies, Egypt and Saudi Arabia.  Egypt, which borders Gaza, is likely to play a significant role in achieving peace, justice, and social progress for Palestinians in Gaza.
• India, the most populous country in the world, is an imperfect democracy where the Hindus dominate other religious groups. Nevertheless, it has a huge common interest with the U.S. in resisting Chinese hegemony in Asia.

Conclusion.  In an imperfect world, the struggle for dominance between democracy and autocracy requires the U.S. to make compromises in working with imperfect democracies, or even other autocracies, to prevail against our main autocratic adversaries.

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Over and over again, on this blog, I discuss the enormous strengths of the U.S., both economically and militarily, compared with the rest of the world.  Furthermore, I discuss the importance of maintaining the U.S.-created and led world order that has preserved relative peace and stability ever since the end of WWII.  I well understand that we have serious internal problems to address, but mostly express optimism that we can solve them.

Nevertheless, I am highly concerned about the current world situation.  As the economist Kevin Warsh points out in a recent WSJ Op-Ed, “the relationship between the U.S. and the rest of the world is more fragile than it’s been in half a century.”  American peace and prosperity grew shaky in the late 1970s with runaway inflation and a weakened military posture.  In the 1980s, inflation was subdued by the Fed with sky-high interest rates, and an aggressive economic and military buildup by Ronald Reagan led to the collapse of communism and the end of the Cold War. 

Now, we again have a world situation somewhat similar to the 1970s.  Massive U.S. spending deficits have set off a new round of inflation. The Federal Reserve has raised interest rates but inflation (3.2% in February 2024) is not yet subdued.  With our disastrous withdrawal from Afghanistan,  Russia’s invasion of Ukraine, war in the Middle East, and China pressing its advantages across the Indo-Pacific,  the analyst Walter Mead says (in the WSJ) that “the Biden Administration is losing its ability to prevent hostile powers from picking at the foundations of the American-led world order.”

We have a big challenge ahead of us.  We need to rein in our reckless deficit spending, now approaching $2 trillion per year, and, at the same time, reach out more forcefully to our allies and potential allies around the world.  As Warsh says, “put plainly, if a country acts as a trusted security partner of the U.S. and treats American businesses and citizens as it treats its own, the U.S. will act reciprocally.  If, however, foreign countries disfavor U.S. interests, they won’t gain the precious benefit of American protection or ready access to U.S. technology or markets.”

Conclusion.  The U.S. is now in a situation comparable to the late 1970s.  We have an inflationary economy and a belligerent world order to address.  We must rein in excessive federal spending, deal more forcefully, and effectively, with our autocratic adversaries, and do both at the same time.  We need leaders who are up to this huge challenge.

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Now that both major party presidential candidates have been all but officially selected, I will be spending more and more time on this blog discussing their stands on the issues.  Both current President Joe Biden and past President Donald Trump have huge liabilities.  First of all, they both have negative favorability ratings.  But, more specifically, each of them is very weak on two different but specific issues.

Joe Biden’s liabilities:

• Inflation and the economy. The huge demand created by the $5 trillion in Covid stimulus spending tripped off inflation in March 2021, shortly after Joe Biden took office and signed the $1.9 trillion American Rescue Plan (see chart below).  Average prices have now increased by 20% in the last three years.  Inflation has come down (3.1% in January 2024) but prices are still increasing.  In particular, housing prices are very high because the only tool the Federal Reserve has for fighting inflation is to raise interest rates, which in turn raises mortgage rates as well as the cost of rental housing.

  

• Open southern border. Apprehensions of illegal immigrants at our southern border are now running at 2.5 million per year, (see chart) more than triple the previous rates under Presidents Obama and Trump, and often exceeding 10,000 per day.  This has created chaos both in southern border towns and large northern cities where many of the undocumented immigrants end up.

  

Donald Trump’s liabilities:

• Election denial. Donald Trump attempted to overthrow the results of the 2020 Presidential Election, which he lost, by filing over sixty lawsuits as well as inciting a riot at the Capitol on January 6, 2021.  His efforts are called a threat to democracy by his opponents but met with zero success.  In fact, there were many (pandemic- related) mail-in voting irregularities (such as missed deadlines) in the November 2020 election, but extensive fraud is unlikely.  Mail-in voting unsurprisingly became popular during the pandemic and remains popular today.  Many states have tightened up mail-in voting procedures in the meantime, so such irregularities are likely to be greatly reduced in November 2024.
• Isolationist foreign policy. Trump’s America First agenda appears to imply less involvement in world affairs. The problem with this attitude is that the U.S. has several autocratic adversaries (China, Russia, Iran, and North Korea) that seek to diminish our strength and influence around the world.  For example, Ukraine needs our help in repelling its invasion by Russia.  It is in our own best interest to join with our many democratic allies to support freedom and democracy whenever they are under threat, as is currently the case with Ukraine.

 Conclusion.  Biden and Trump both have major liabilities that weaken their support with many voters.  How these liabilities will affect the November 2024 election remains to be seen.

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In this blog, I discuss major issues facing the U.S., both foreign and domestic.  The analysis is based on my view that we are fundamentally a strong country.  Of course, we have problems, but our free enterprise economic system and democratic political system enable us to address our shortcomings and make steady progress in improving society.

As strong as we are economically and militarily, we have several autocratic adversaries, such as China, Russia, Iran, and North Korea, who want to diminish us for their own tyrannical purposes.  One glaring example, it has now been two years since Russia invaded Ukraine which badly needs our continued support.  Consider:

• Ukraine wants to be free and independent. Helping Ukraine defend itself is not only the right thing to do; it’s in our own best interest to promote freedom and democracy around the world.  Ukrainians are willing and able to do the fighting. But they need our continued help with military supplies.
• China wants to take over Taiwan. If we are unwilling to help Ukraine defend itself against Russia, will we be willing to help Taiwan defend itself against China?  It’s important to ensure that China gets the proper message about our willingness to defend freedom and democracy.
• Russia is a brutal, tyrannical state.  Political dissident Alexei Navalny recently died in a Siberian penal colony.  The Americans Evan Gershkovich and Paul Whelan are being held in prison on trumped-up spying charges.
• Is Eastern Europe next for Russia?  Russia’s leader, Vladimir Putin, claims that Ukraine was historically a part of Russia and therefore belongs to Russia.  The Baltic countries Estonia, Latvia, and Lithuania have significant Russian populations. If Putin is successful in annexing all or part of Ukraine, will this encourage him to invade the Balts next?
• Eleven European countries are now meeting the NATO target of spending at least 2% of GDP on defense (see chart),and several more have promised to do so this year. If necessary,  Europe must be ready to defend itself against further Russian aggression.

Conclusion.  The United States is very strong, with many democratic allies, but our autocratic adversaries around the world are constantly testing our resolve to defend democracy and freedom.  The greatest threat right now is in Ukraine.  It is vitally in our own best interest to help Ukraine defend itself against Russian aggression.  If Ukraine falls, another currently free country will become the next battleground.

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Although I normally try to discuss important national issues separate from the personalities involved, the 2024 presidential election campaign is now shaping up.  What the candidates are doing and saying has taken center stage and so becomes the focus of attention.  I have previously discussed Bidenomics, but now let’s focus on it more directly.

Consider:

• There is little dispute that it was the $5 trillion Covid stimulus spending that tripped off the latest round of inflation starting in March of 2021.  In fact, the last $1.9 trillion of this stimulus, the so-called American Rescue Plan, was signed by President Biden, right after he took office.  The attached chart clearly shows inflation taking off at this time.

  

• National Debt. From the attached chart, it is easy to determine that during 2017 – 2020, the four years of Trump, the total national debt was about $5.7 trillion.  For Biden’s four years, 2021 – 2024, using the CBO projection of $1.6 trillion for 2024, the total new debt will be $7.5 trillion.  Both of these debt totals are excessive.  But Biden’s last $1.9 trillion of Covid stimulus was worse than Trump’s $3 trillion, because by March 2021 the U.S. economy was already starting to recover from the pandemic slowdown.
  The deficit of $1.7 trillion in FY 2023 (see attached chart) was way too large with no recession or other emergency, such as a pandemic.

  
  Furthermore, the Congressional Budget Office is now projecting additional deficits totaling $20 trillion over the next ten years (see the attached chart).

  

• Interest Rates. The Federal Reserve has raised short-term interest rates to the highest level in years to fight inflation.  Of course, this means much higher interest payments on our exploding national debt.  In addition, home sales in 2023 were at a 28-year low (see attached chart), because of high mortgage rates.

  

• Average Income. The Bureau of Labor Statistics reports that real (inflation-adjusted) average wages have fallen during the Biden administration (see the attached chart).

  

Conclusion.  It is hard to avoid the conclusion that Bidenomics is a disaster.  The $1.9 trillion American Rescue Plan in early 2021 tripped off inflation which is having many harmful effects.  Continued reckless deficit spending will keep inflation higher longer. This not only hurts millions of Americans right now, it endangers our country’s future by making a new financial (debt) crisis more likely in the near future.  President Biden brags about all the money he is spending and therefore lacks any sense of fiscal responsibility.

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Normally, on this blog, I discuss public policy without referring to the personalities involved.  But the U.S. presidential primary voting season has now started and so personalities are hard to avoid!  A recent survey has discovered that 67% of voters do not want a Biden/Trump rematch.  A recent WSJ article concludes that such a rematch shows how far U.S. democracy has fallen.  Our country now has a viable alternative: Nikki Haley remains in the Republican Primary along with Donald Trump.

Consider the huge contrasts between them:

• Trump had an 11-point victory margin over Haley in New Hampshire. Trump won 75% of Republicans, but Haley won 60% of independents, crucial for a Republican victory in November.  If Trump is convicted of a felony, 42% of New Hampshire voters and a third of Iowa’s caucus goers said Trump would be unfit for the presidency.
• At a time when America often appears weak around the world, Haley, but not Trump, supports continuing to help Ukraine defend itself against Russian invasion. Such support for democracy is critical in deterring our autocratic adversaries.
• Haley, as opposed to Trump, understands that we have a huge debt problem, and that entitlement reform (SS and Medicare) is crucial for seriously addressing it.
• Right now, as voters around the country start paying more attention, she needs a strong rationale for why she is qualified to be president.  How about a freedom agenda: free from failing schools and DEI mandates, free from social media censorship, free from smash-and-grab robberies, free from unchecked illegal immigration, federal overspending, and tyrannical bureaucrats.

  

• A large part of the Trump problem is his highly disorganized way of doing business. Haley responds, “You can’t defeat Democrat chaos with Republican chaos.  And that’s what Donald Trump gives us.”

Conclusion.  Nikki Haley is now Donald Trump’s only remaining competition in the Republican Presidential Primary.  She will become an intense focus of attention in the coming days.  She can give American voters what they are overwhelmingly looking for in November 2024:  an alternative to choosing between Joe Biden and Donald Trump.

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I am mostly an optimist about the future of the United States.  But, according to press reports, we have a lot of pessimists in our midst.  Our country certainly has challenges to deal with, and many people wonder if we will be able to address them all successfully.  I understand their concern, but, with one possible exception, I believe we will meet all the major challenges we face without major repercussions. 

Consider:

• The world in disarray. There are now major conflagrations occurring in Ukraine and the Middle East.  Russia invaded Ukraine almost two years ago and Hamas surprised Israel with an attack on October 7.  Both are serious regional wars in which the U.S. is heavily involved.  The U.S. and its allies are helping Ukraine defend itself.  Ukraine wants to expel Russia from all occupied territory, but, it may have to instead negotiate a compromise settlement.  At any rate, it is unlikely that this war will spread beyond the Ukraine/Russia border area.
  In the Middle East, the Israel/Hamas Gaza war is likely to end soon in a cease-fire with some sort of international presence involved to finally achieve justice for Palestinians in Gaza and the West Bank.  I do not think that the current situation will spill out into a larger war in the Middle East because the U.S. and the local powers, Egypt, and Saudi Arabia, do not want this to happen.
• U.S./China rivalry. China is challenging the U.S.-created world order (Pax Americana) established at the end of WWII.  However, China benefits enormously from international trade with the West and is unlikely to attempt to capture Taiwan by force.  Furthermore, China currently has its own big internal problems to address. In other words, our (economic) competition with China will continue but will unlikely lead to a military confrontation.
• U.S. political polarization. The progressive left and the conservative right despise each other, and this creates much internal division.  Nationally, it means that a partisan split in Congress makes it difficult to pass bipartisan legislation.  At the state level, only Pennsylvania has a partisan split in the control of its legislative chambers.  I consider our current political polarization as democracy in action and not a sign of national distress.  Eventually, this unpleasant situation will resolve itself politically in a peaceful manner.
• National Debt. This is a very serious problem that must be addressed soon to avoid a financial crisis much worse than the one that occurred in 2008.  The only way to effectively do this is with entitlement reform, which, unfortunately, elected national leaders are loath to address.  The debt problem can be solved but, so far, the political will to do it does not exist.

Conclusion.  At the present time, there is an untidy world order with lots of regional stress.  Furthermore, the U.S. is almost equally divided between left and right political factions, and this generates great animosity.  These situations, as unpleasant as they are, will fade away over time in a relatively peaceful manner.  Unfortunately, the U.S. national debt is rapidly getting worse.  If not addressed soon by the President and Congress, a huge new financial crisis will develop that will cause great damage both to the U.S. itself and the rules-based world order that it has created and led since the end of WWII.

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Lately, on this blog, I have been discussing the need for continued U.S. world leadership.  We are the strongest country in the world, economically and militarily.  We are the leader of the free (democratic) world.  We do, of course, have autocratic adversaries nipping at our heels.  But it is our responsibility to continue promoting the free, democratic world order we created after WWII and have supported and defended ever since.

Is the U.S. capable of continuing to fulfill this critical role?  What is involved?

• First of all, we have enormous strengths as a nation.  By stretching across the entire North American continent, from the Pacific Ocean to the Atlantic Ocean, and with friendly northern and southern neighbors, we are difficult to conquer. We have a brilliant, long-lasting, constitutional form of government which has made us, and keeps us, free and prosperous.  We continue to have a dynamic, entrepreneurial economy of rugged individualists that leads the world in developing new products and technologies.
• We are making steady social progress. Slavery ended in 1865.  Jim Crow racism ended in the 1960s civil rights era. Black poverty declined dramatically from 1940 to 1960, and significantly from 1960 to 1970.  This decline still continues, but more slowly.  In addition, child poverty was lower than ever in 2022.  As another example, school choice is expanding dramatically.
• In recent years, a new problem has arisen: political polarization. The left denounces the evil of what it claims the country has always been: racist, oppressive, toxically male, transphobic. The right rages against the evil of what the country has become: perverse, perverted, Marxist, elitist, woke.   The two sides don’t trust each other.  A deeper fear is that this nightmare is just getting started.  Artificial Intelligence might magnify our differences by generating and spreading even more misinformation on its own.
• In the midst of our domestic political strife, humanity overall is making much progress.  Global child mortality is decreasing. One hundred thousand people are emerging from extreme poverty per day.  On the world health front, polio and Guinea worm disease are near eradication. In the U.S., CRISPR gene-editing techniques are starting to be used for sickle cell disease and other ailments.

Conclusion.  On the one hand, the U.S. is a strong, prosperous country that has been very successful in creating a stable and relatively peaceful world order since the end of WWII. Furthermore, great progress is being made worldwide in reducing poverty and improving health.  On the other hand, the U.S. is in the midst of great political strife.  How will our internal divisions play out in the end?  We likely won’t know the outcome for some time.  But I, personally, am optimistic that we, the “indispensable” nation, will be able to resolve our political differences in such a way that our world leadership role will continue unabated for many years to come.

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My recent posts have discussed the role of the U.S. in the world and how it could be improved.  Ever since the end of WWII, the U.S. has been the leader of the free (democratic) world.   Since the end of the Cold War in the late 1980s, the U.S. has been the dominant power in the world.  Our economic and military strength has given us the clout to maintain stability and order worldwide.

How does the U.S. stand today, both domestically and internationally? First of all, we have several very serious domestic problems:

• As a result of $5 trillion in covid pandemic stimulus spending, inflation flared up starting in Spring 2021 and is still, at 3.1% in November 2023, at a high level. The Federal Reserve has indicated that it doesn’t expect to raise short-term interest rates any higher than the current level of 5.25%, but how soon will it be able to lower this rate substantially? In the meantime, home mortgage rates are very high which greatly retards the housing market.

  

• With ever-larger annual spending deficits ($1.7 trillion in FY 2023), our national debt is ballooning. This creates a huge fiscal trap for the future, all the more urgent because higher interest rates mean higher interest payments on our current massive debt of $34 trillion.

  

• Our southern border is now virtually out of control, with 10,000 or more illegal immigrants entering the country every day. It will be difficult for Congress and the President to get this very serious problem back under control.

In addition to these domestic problems, the U.S.-led international rules-based order is becoming more unstable.

• First of all, in August 2021, was our disastrous withdrawal from Afghanistan. Biden’s own military advisors recommended keeping a small residual U.S. force to support the Afghan army but this did not happen.  Consequently, our hasty withdrawal left a chaotic situation on the ground and the Taliban took control immediately.
• In February 2022, Russia invaded Ukraine. The Ukrainian people are valiantly resisting the invasion with much material support from the U.S. and its European allies.  Russia is supported by military supplies from both Iran and North Korea.  It will be difficult for the much smaller Ukrainian army to push the Russians out.

  

• Just two months ago, on October 7, the Hamas forces in Gaza attacked Israel across the border, killing 1200 people. Now, there is a war raging in Gaza as Israel attempts to drive Hamas out.

Conclusion.  Presently, we are facing big domestic problems (inflation, massive debt, open southern border) at the same time as the stable U.S.-led world order is being challenged by several of our autocratic adversaries.  In other words, the U.S. has big domestic and international problems to deal with simultaneously.  Can our national leaders rise to the task of meeting these big challenges?

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