I am optimistic about the future of the United States, as I have explained many times on this blog. But pessimism is much too prevalent in the media. A list of current problems: the botched Afghan pullout, urban crime waves, easily foreseen inflation, mayhem at the southern border, a self-generated energy crisis, etc.
- The pandemic is well under control, at least in the U.S. The latest wave of daily new infections is shrinking (see chart) and the CDC has relaxed its safety guidelines.
- The Ukrainians are holding their own against the Russian invasion of their country. They want freedom and democracy and are willing to fight and die to achieve it. The U.S. and its NATO allies are providing Ukraine with weapons and military supplies which are being used effectively by the Ukrainian military forces to slow Russian advances to a standstill. The whole world sees how the West is helping Ukraine defend itself. This is a big boost for democracy around the world.
- American democracy is in good shape. In fact, democracy is thriving in the U.S. The 2020 presidential election was a stress test but democracy came through in excellent shape. Since there were, however, pandemic-related voting irregularities in 2020, red state efforts to tighten up voting procedures for mail-in and absentee voting are simply a common sense approach to maintaining election integrity.
- Inflation really is, of course, a big problem. We are already in a mild recession that is likely to get worse if the Federal Reserve continues to act aggressively in raising interest rates in order to bring inflation back down to the desired 2% level.
- Deficits and Debt. Our rapidly growing national debt, now in the vicinity of $30 trillion, as well as Federal Reserve bond holdings (quantitative easing), in the vicinity of $9 trillion, have become a loaded time bomb of loose fiscal and monetary policy. The $5 trillion in Covid-related stimulus spending essentially blew the cork out of the (debt) bottle and tripped off our current bout of inflation. The FED can lower the inflation rate back down to the 2% level by acting aggressively. But, to keep inflation under control in the future, we must rapidly reduce our annual spending deficits. Hopefully, our national leaders will now be able to much better appreciate the need for real fiscal responsibility and have the political will to get this job done!
Conclusion. The U.S. is in good shape in a general sense in spite of several particular problems as mentioned. Inflation is, however, very urgent and serious and must be dealt with firmly by the Federal Reserve. Since inflation was tripped off by excessive stimulus spending, Congress and the President will now have to act in a far more fiscally responsible manner to keep inflation under control.