June 28, 2026
On this blog, I discuss important national issues, often focused on economic and fiscal issues.  Lately, I have been making the case that the U.S. is a very strong country,  despite the current problems we have that we are very concerned about.  Today I want to elaborate on this point of view.

To summarize the previous discussion, we are a very strong country primarily because of our brilliant constitution, dating back to 1787, our well-established free-enterprise economic system, and also fortunate circumstances such as our bicoastal geography and relatively large population.

I now refer to a recent Wall Street Journal editorial, which discusses the so-called  “four i’s” problem:  inflation, Iran, Israel, and ineptitude, that goes back many years.

• President Jimmy Carter. In the late 1970’s, Mr. Carter had to deal not only with inflation, but also with the Iranian hostage crisis, which was not resolved until the day he left office in January 1981.  He was not responsible for the high rate of inflation during the late seventies, and, in fact, dealt with it firmly by appointing Paul Volcker as Federal Reserve Chair in August, 1979.  But Carter still has a reputation for ineptness because of the way he handled the Iranian hostage crisis.
• President Joe Biden. Biden did, in fact, trip off our recent bout of inflation with the $1.9 trillion American Rescue Plan, signed in March 2021.  He also had no success in negotiating with Iran about nuclear weapons safeguards.  He is, correctly, in my view, considered a poor, inept president.

  

• President Donald Trump.  Now, Mr. Trump is also faced with the “four I’s” problem.  He is trying hard to limit Iran’s nuclear weapons capabilities, but the closing of the Strait of Hormuz has raised the price of oil significantly, and therefore raised the rate of inflation (the CPI is currently 4.2%).  Trump has many personal shortcomings (he can be mean-spirited, vindictive, narcissistic, and bullyish, among other things).  For example, he is now feuding with Senate Republicans, among his potentially strongest supporters.  In other words, his questionable character often makes implementing his (many beneficial) policies more difficult than necessary.

Conclusion.  We are a very strong country, both economically and militarily, and are likely to maintain our great strength for many years to come, regardless of who our leaders are.  Presidents come and go, some good, some bad.  Presidents Carter and Biden were considered poor overall.  It is too early to rate Trump (he has over two years to go).  But his overall success is not assured at this point.

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On this blog, I discuss important national issues, often focusing on economic and fiscal matters.  Lately, I have explained why I think the U.S. is such a strong country, describing various components of this strength. Today, I describe another aspect of our strength: the relative weakness of our autocratic adversaries (China, Russia, Iran, and North Korea).  Consider:

• China needs an economic relationship with the U.S. It has the second-largest economy in the world, but it can’t absorb the sheer amount of goods it produces.  Therefore, it relies overwhelmingly on exports and cannot afford hostile relations with the U.S.  It is therefore unlikely to try to take Taiwan by force.

However, to some extent, “Chinese leaders no longer seem to view U.S. pressure on trade and technology as grave threats demanding compromise.”  The U.S. can counteract this Chinese hubris with a combination of deterrence and the restoration of human connections.

In addition, “AI is bound to subvert communism.”  “China seeks to control it, but the idea of freedom is baked into its training on all human knowledge.”

• Russia. The war in Ukraine is greatly weakening the Russian economy.  Inflation is rampant, and gas shortages are increasing.  “A pressure campaign using sanctions and enforcement could compel Putin to reach a meaningful peace.”
• Iran is gradually being forced to agree to permanent nuclear disarmament and to keep the Strait of Hormuz open to international traffic.
• North Korea is a nuisance but not a real threat to world peace. If it were to fire nuclear missiles at the U.S., they would almost surely be destroyed by our missile defense system.

Conclusion.  The U.S. has several autocratic adversaries (China, Russia, Iran, and North Korea).   However, their relative economic and military weaknesses mean that they are not a big threat to overall U.S. hegemony.  Even our strongest rival, China, has sufficiently big economic problems that it can’t afford hostile relations with the U.S.

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On this blog, I discuss important national issues, often concerning economic and fiscal matters.  Recently, I have been discussing why the U.S. is such a strong country.  Fundamentally, we are a constitutional republic with a dynamic free market economy.  We also have favorable circumstances, such as a bicoastal geography and a large population.  Furthermore, we have a thriving democratic tradition.

But there is much more as well.  Today, I discuss our long tradition of upward mobility.  Consider:

• Preparation for economic success. This is available to everyone.  Graduate from high school.  Acquire a useful skill either in a trade or else an academic skill by going to college.  Establish your career path before starting a family.  Be prepared when opportunity knocks!
• The expanding middle class. The middle class is growing steadily (see chart below).  More and more households are moving from the lower-middle class into the core-middle class and then into the upper-middle class.
• The world’s wealthiest people are largely American innovators. They have made the United States by far the wealthiest country in the world. All Americans benefit by living in such a prosperous country.
• The world’s wealthiest companies are mostly American. They are American technology companies. that, again, greatly benefit their home country, where they are located, and find most of their employees.
• The U.S. has dominated in Nobel Prize winners.  Roughly 40% of Nobel Prize winners over the years have been American.

Conclusion.  One reason we are such a strong country is that we have so many (economically and professionally) successful people as well as very large companies.  The great success they have generated benefits all Americans, rich, poor, and middle class, alike. But all Americans can take advantage of the golden opportunities for success this country offers.

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On this blog, I discuss important national issues, often concerning fiscal and economic matters.  Recently, I argued that the U.S. is a very strong country, noting our constitutional republican form of government, favorable geographic circumstances, and free enterprise economic system, among other valuable characteristics.

Today, I elaborate on the importance of our strong democratic tradition.  Consider:

• Free and fair elections. This is the essence of democracy.  The people have the final say at the ballot box, and Americans can be confident that their votes are processed and counted accurately.  In the national elections of November 2020, there were some COVID-related irregularities, especially the delayed counting of mail-in votes, but these problems have now been largely resolved at the state and county level, where elections are regulated and conducted.
  Furthermore, our system of decentralized election procedures is the best guarantee of election integrity.  The possibility and effect of tampering with elections by outside malevolent parties is greatly minimized this way.
• Dissatisfaction with incumbents. There is especially much complaining today that President Trump is too authoritarian.  He does, for sure, often push to expand the limits of presidential authority.  But he is frequently restrained by the courts, and he does abide by judicial rulings, even when he appeals decisions he doesn’t like.
  Competition between the two political parties leads to better government over time.  When one party makes a major mistake, the other side picks up popular support.
• The main source of our national strength is our long-standing institutions (constitution, favorable geography, free enterprise economic system, etc.) rather than the quality of our national leadership, which can change greatly from one election to the next. We have had good presidents and poor presidents over the years.  But the fundamental strength of our country continues unabated by the personal failings of particular leaders.

Conclusion.  Democratic procedures are not a guarantee of national strength and success, but they are certainly needed for a country to thrive in the long run.  Our free and fair election system is one of the great strengths of our country.

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On this blog, I discuss important national issues, often about fiscal and economic matters.  Most recently, I made the case that the U.S. is a very strong country for a variety of reasons: constitutionally, economically, and militarily.

Today, I take a step back and look at the U.S. from the view of Ray Dalio’s Cyclic Theory of History,  which explores how empires form, grow, and decline over long periods of time.  According to Dalio, there are three different factors (orders) that cause these cycles to occur: the monetary order, the domestic political order, and the international world order.  Let’s take each in turn:

• The Monetary Order. The U.S. now has a national debt of $39 trillion.  It is collecting approximately $5 trillion a year in taxes and spending $7 trillion a year, thus adding $2 trillion a year to an already excessively large debt.  This is a huge problem of fiscal irresponsibility and cannot continue much longer without tripping off a new, and very serious, financial crisis.  The only way to rein in this excessive federal spending is to make major reforms to entitlement programs such as Social Security, Medicare, and Medicaid.  This is very hard to do for members of Congress who have to run for reelection.
• The Domestic Political Order. The U.S. is highly polarized politically, not only in Congress but at the state level as well.  There are currently 25 (red) states in which Republicans have control of both legislative branches with either large supermajorities or else hold the governorship as well, and 15 (blue) states controlled by the Democrats in this way (see chart below).  This means that in 40 out of 50 states, one party can enact controversial policies largely on its own.  Note, furthermore, that the red states are gaining population overall while the blue states are losing population.  This will likely have a big effect on redistricting after the 2030 census.  I view this polarization as unfortunate but not necessarily destabilizing for the U.S.

  

• The International World Order. The U.S. is much stronger than its autocratic adversaries: China, Russia, Iran, and North Korea.  China has an export-dependent economy and needs a favorable trade arrangement with the U.S. to prosper.  Russia is in economic decline because of its disastrous invasion of Ukraine. Iran will have to reach a deal soon with the U.S. to avoid the collapse of its oil-based export economy.   North Korea is a nuisance but not a serious threat to our national security.  In other words, the international world order is favorable to the U.S. for the foreseeable future.

Conclusion.  Of Ray Dalio’s three major controlling orders, the first one, the monetary order, looks bad for the U.S., the second one, the domestic political order, is disturbing but not really a crisis, and the third one, the international world order, leans in our favor, for the foreseeable future.  We may have to deal with a new financial crisis over our massive and rapidly growing debt in the near future. This will be painful for many Americans, but will probably not significantly affect our overall national strength.

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On this blog, I discuss important national issues, often about fiscal and economic matters.  Today, I take a step back to discuss the more basic question of why the U.S. is such a strong country, and therefore has so much clout in world affairs.

Consider:

• We are a constitutional republic. The U.S. Constitution, dating back to 1787, is a brilliant document, promoting liberty and justice for all.  We have three branches of government, the Legislative, Executive, and Judicial, with multiple checks and balances between them.  All powers not specifically given to the federal government are reserved for the states, which keeps most functions of government decentralized and, therefore, less threatening to our liberty. The Bill of Rights, comprising the first ten amendments to the Constitution, clearly lays out our many fundamental guarantees of personal freedom.
• Favorable circumstances. We have a bicoastal geography with friendly neighbors on the north and south.  This makes it much easier to defend our homeland, if we are ever attacked.  Our relatively large population, the third largest in the world, after India and China, provides sufficient manpower for our many innovative endeavors.
• A Free enterprise economic system. A free enterprise, market economy has historically been proven, over and over again, to be by far the most successful form of commerce devised by humankind.  We now know without a doubt that socialism (and communism) is the road to serfdom.
• The American Dream is alive and well.  In particular, the American Middle Class is expanding such that its size is growing with respect to the size of the other income classes. In other words, we have more middle class, and fewer poor, people on an ever-increasing basis.
• The American Economy is the envy of the world and is growing steadily bigger and better. Eight of the ten largest companies in the world are American (technology giants).
• We are sufficiently militarily strong to not only defend ourselves but to keep the world safe for democracy as well. This is important because we do have autocratic adversaries such as China, Russia, Iran, and North Korea.  But we have many democratic allies around the world.  Democracies are almost always able to resolve their disputes peacefully and seldom go to war with each other.
• Of course, there are occasional severe challenges to our great overall success. The Civil War challenged whether “any nation so conceived and so dedicated can long endure.”  The Great Depression in the 1930s was likewise a huge challenge to our economic system.  The unconventional current presidency of Donald Trump is another challenge.  But our system is now almost 250 years old and is so solid that it should easily survive and prosper from current crises as well as it did from past ones.

Conclusion.  The United States is very strong economically and militarily.  Furthermore, we have a very solid democratic tradition embedded in our brilliant constitutional republican form of government.  We are the envy of the world and should continue to prosper for many years to come.

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On this blog, I discuss important national issues, often, but not always, relating to economic or fiscal matters.  Sometimes this means presidential policies, good or bad.

Today, I discuss the changing nature of the U.S. middle class.  First, some definitions from the American Enterprise Institute (AEI).  To be specific, for a household size of three, we divide income classes into five groups: the Poor (under $40,000), the Lower-middle class ($40,000 – $67,000), the Core-middle class ($67,000 – $133,000), the Upper-middle class ($133,000 – $400,000), and the Rich (above $400,000).  Other household sizes have appropriately different cutoffs.  Incomes are stated in 2024 dollars, and adjusted for inflation.

Consider:

• First, examine an overall graph of the five income groups, from 1979 – 2024 (see below). Note how each group is changing over time with the biggest growth by far appearing in the Upper-middle class.

  

• Now look at the percentage changes for each group in 1979, 2001 and 2024 (see below). Clearly, the size of the Poor group and the Lower-Middle Class group are shrinking greatly, the size of the Core-Middle Class group is slightly shrinking, and the size of the Upper-Middle Class is expanding greatly.

  

• Finally, look at the percentage change in family income by percentile over the same time period (see below). Yes, the higher the percentile, the faster the family income is growing.  But all percentile groups are growing in earned income, except for the very bottom group.

  

Conclusion.  What is happening overall in a general sense (see middle graph), is that there are fewer households in the bottom two income groups and a huge increase in the number of households in the fourth highest group.  In sum, the number of households below the Core-middle class fell from 54% of the total to 35% of the total.  The overall Middle class grew from 70% of the total to 78% of the total, a significant jump.  In other words, the middle class is expanding in size (and at the upper end).  This is a very beneficial shift for American society overall.

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On this blog, I discuss important national issues, often, but not always, concerning fiscal and economic issues.  Most recently, I made the case that Trump is doing the right thing in Iran. Today, I extend this discussion to Trump’s foreign policy in general.

• Iran War. Iran is a terrorist state and simply cannot be allowed to acquire nuclear weapons.  The current military action should virtually guarantee this outcome for many years to come.  Since 20% of the world’s oil comes from the Persian Gulf, the Strait of Hormuz must be reopened to international shipping traffic before the war ends.  Hopefully, boots on the ground will not be necessary to accomplish this.

  

• Other rogue states. Trump removed Venezuela’s President Maduro without an invasion. He is leaning on the new government to release political prisoners and restore democracy.  Investment by U.S. oil companies can restore Venezuela’s oil industry, but this won’t take place without political stability.  Cuba wants U.S. help to restore its economy.  Again, political reform will be needed to obtain our help.  North Korea is another rogue state, but is highly unlikely to use its nuclear weapons.
• China. China wants to take over Taiwan, but it also wants a U.S. market for its export-driven economy.  If it attacks Taiwan militarily, it will not only lose our huge market but will be sanctioned by the entire Western world.  China is an ideological adversary, but mostly in an economic rather than a military sense. This is especially true technologically, where we are fierce competitors with China for supremacy.
• Russia. Russia is economically weak (ranking ninth worldwide in GDP) and militarily tied down with its mostly unsuccessful invasion of Ukraine.  It does not pose a serious threat to the U.S.  In fact, once the Ukraine war is over, we should try to help it create a stronger economy.

Conclusion.  The U.S. is still by far the strongest country in the world, both economically and militarily.  By cracking down on rogue states like Venezuela, Cuba and now Iran, and being willing to negotiate our differences with China and Russia, Trump is doing a good job in preserving U.S. predominance in world affairs.

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On this blog, I discuss major national issues, often, but not always, focusing on economic and fiscal issues.  I have recently criticized President Trump for letting spectacle get in the way of substance.

Today, I discuss why I support Trump’s decision to join with Israel in attacking Iran’s entire military structure, including its nuclear weapons infrastructure, as well as its missile and drone facilities.

Consider:

• Iran has been spreading terror throughout the Middle East and killing Americans, over and over again, ever since 1979.
• Venezuela was conducting drug trade by smuggling cocaine into the U.S. So we took out the illegitimate president (Maduro) and are leaning on his lieutenants to cooperate in restoring oil production as well as restoring democracy.
• This is the Trump Doctrine and is now being applied in Iran as well. We have taken out the top leadership (Ayatollah Khamenei) and are destroying Iran’s entire military infrastructure.

  

• The operation is rapidly destroying Iranian military facilities (see chart below) and is likely to be completed in just a few more days.

  

• The Trump Doctrine avoids boots on the ground.  We want regime change, but we do not invade other countries to achieve it.
• The Trump Doctrine builds on long-standing American foreign policy tradition. We are not isolationist and we are not imperialistic (looking for land to annex).  But we do intervene in specific problems around the world in order to protect our vital interests and to promote and defend democracy.

  

Conclusion.  In Venezuela and now in Iran, we have shown that we are willing to intervene to protect our national interests as well as to protect democracy when it is threatened.

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On this blog, I discuss important national issues, often emphasizing economic and fiscal matters.  Today I discuss one of Trump’s major failings:  getting carried away by attacking his political opponents rather than focusing on his positive achievements.

Consider:

• Tariffs. The Supreme Court has just struck down his use of emergency powers to declare arbitrary and capricious tariffs on any other country he felt like.  Since most of his tariffs are hurting the American economy, he should be pleased to see his tariffs cut back to primarily national security situations like China.  Instead, he criticizes the Supreme Court Justices who voted against his tariffs.

  

• Closing the southern border. One of the first things Trump did in his second term was to close our southern border to illegal immigrants.  This action was very well received nationally.  But now he has jeopardized that success by cracking down too hard on undocumented immigrants who are both working and law-abiding.  Again, he is squandering the favorable reaction he received from closing the border in the first place.

  

• Encouraging Europe to increase defense spending. Europe has gotten the message that it needs to take its self-defense more seriously. Unfortunately, Trump has aggravated our relations with Europe by threatening to invade Greenland and annex it to the U.S.  He backed off from this threat but not before badly damaging our relations with European allies.

  

• Regime change in Venezuela. Trump removed Venezuela’s dictator, Nicolas Maduro, from office and has let his lieutenants stay in power. This could become a stable transition to democracy in Venezuela, but only if Trump keeps up the pressure on the current president, Delcy Rodriguez.  If this approach works (leading soon to fair elections), it will be a big victory for Trump.

  

Conclusion.  Trump’s unconventional methods are succeeding in many cases, but would work even better if he refrained from both rhetorical excesses and overreacting with excessive force.  If he wanted to, he could be “effective without being offensive.”

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