As I have said many times on this blog, I am optimistic about the long-term future of the U.S. The U.S. is not only the strongest country in the world economically and militarily, but the strength of the U.S. and its democratic allies together far surpasses the combined strength of our major adversaries: China, Russia, Iran, and North Korea.
But we have now clearly hit a rough patch. Consider:
- Inflation is still high at 6% (as of February 2023). The Federal Reserve is determined to bring it down by continuing to raise interest rates as high as necessary. But now bank failure has become a problem precisely as a result of the rapid rise of interest rates. If the Fed slows up on raising interest rates to save more banks, inflation will take much longer to subdue.
- The national debt has reached $31.4 trillion and the House Republicans (rightly) insist on big budget cuts in return for agreeing to raise the debt ceiling. Hopefully, the Biden Administration will come to agree that a strong emphasis on fiscal restraint is imperative in the fight against inflation.
- Donald Trump has now been indicted for campaign finance violations dating back to 2016. Since he is an announced candidate for reelection in 2024, this throws a wrench into the Republican primary process leading up to November 2024. His indictment will probably unite Democrats and divide Republicans. It makes Trump more likely to be nominated in 2024 and therefore more likely that President Biden will be reelected.
- Joe Biden is a disaster for the economy, with his strong support of massive new, deficit-financed, spending initiatives in the past two years. His reelection in 2024 would likely continue this reckless spending blowout and put the U.S. at risk for financial default.
- Donald Trump and Joe Biden are both very poor choices for president. Trump had some policy victories in his previous term as president but he is too erratic and narcissistic to be a good choice for reelection. Even though Joe Biden is doing a good job on Ukraine, he is economically incompetent and his reelection could easily lead to a new, and much worse, financial crisis.
- The one major event which is going well for the democratic world right now is the war in Ukraine. Russia’s invasion of Ukraine in February 2022 was a major miscalculation and is badly damaging the Russian economy. Saving Ukraine from Russian domination would be a major victory for the free world. It will make it far less likely that China will invade Taiwan anytime soon.
Conclusion. Right now the U.S. is undergoing a rough period with the increased danger of prolonged inflation, a spending blowout by the Biden Administration and a more volatile U.S. presidential campaign in the offing. But the U.S. and its democratic allies are very strong economically and militarily, which should enable us to ride out the current rough patch and continue to thrive for many years to come. It would greatly help if neither Trump nor Biden is reelected in 2024.
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