During most of my life I have been proud that the United State is the strongest, most democratic, and politically stable nation on earth. That strength spanned the entire spectrum of civilized achievement from economics, technology, and innovation to human rights, social justice, and the rule of law.
In all that time I have known that while we were not perfect as a society we were continuing to get better and represented the best the world had to offer. I had no idea that in my life time I would witness America yield its leadership role in the world to the likes of China and begin an economic and political decline toward second tier status. But that is what is happening before my eyes.
To be sure the Trump Administration’s incompetence and authoritarian tendencies are substantially accelerating the process. But the seeds of our decline were sown long before, starting in earnest in the 1980s. Policies of the Reagan Administration initiated our decline and today under the Trump Administration the very foundation of our democracy is at risk.
The political departure from reality began when the Reagan Administration introduced the concept of supply side economics – the idea that cutting federal income taxes would so stimulate the economy that federal revenue would actually increase. The theory looked perfect on paper. I was a strong and outspoken proponent at the time. It made so much sense to me.
But Reagan combined those historic tax cuts with substantially expanded military spending. The Administration began aggressive military provocation and posturing in perfect sync with the massive tax cuts. Some will argue that those strong military initiatives led to the collapse of the Soviet Union and the end of the cold war. There may be a grain of truth to that but more likely it just accelerated the USSR’s demise by a year or maybe two. I was doing business in the Soviet Union during that period and it was clear even to me that the Soviet Government was loosing control of its economy as well as popular support. Even its business leaders and senior government bureaucrats with whom I dealt were seriously disillusioned and admitted it.
The sad fact of supply side economics turned out to be quite different from that forecasted. The military spending certainly did stimulate the economy. But as a practical economic policy it just did not work. The revenue growth never made up for the deep cuts in the tax base. Historic federal deficits accrued from that experiment. To his credit Reagan gradually recognized the fallacy of the supply side strategy and accepted the necessity for several tax increases during his tenure. But the economic damage was done. The national debt had dramatically increased by that time and deficits continued growing.
With more rational tax policies from the first Bush and the Clinton Administrations in the ‘90s we actually balanced the federal budget before the end of that decade. But then under a new Republican Administration and Congress we repeated the same mistake in the 2000s – large tax cuts, substantial military spending increases, including the launch of two wars, and dramatic new social programs. None of that was paid for through taxation or spending reductions. And as was easily predictable from our Reagan era experience we witnessed the same result – massive federal deficits, run away financial speculation, and an economic meltdown. The saddest part though is that most Republicans don’t seem to have learned anything from either of those two experiences.
Now after that irresponsible fiscal behavior led to a near collapse of our economy and years of slow economic recovery our national debt is $20 trillion, much of it owed to China, America’s primary economic competitor. Our infrastructure is crumbling, our health and education systems are in shambles, and federal deficits continue. Of course the Social Security and Medicare programs are also facing financial stress and future insolvency in light of an aging population and the high retirement rate of the “baby boomers”.
With that backdrop the Trump Administration and Republican Congressional leaders again decided to implement the same supply side economic playbook that has already failed twice before. They passed a $1.5 trillion tax cut and substantially increased military spending for the 3rd time without even debating how to pay for it. They have offered no specific strategy, plan, or even vision for how to restore national fiscal integrity, invest in rebuilding our infrastructure, save Social Security and Medicare, or address the workforce retraining, education, and other structural reforms necessary for a competitive 21st century American economy. Under the current brilliant Republican leadership we are headed for an annual federal deficit in excess of a trillion dollars within the next fiscal year or so.
If America is to remain a world leader in the 21st century we need strong leadership in both the Presidency and Congress. Political bridges must be built and long term strategies for dealing with our domestic challenges must be mapped and implemented. Equally important we need to actively support the institutions and norms in the international community. Above all the US government must demonstrate predictability on the world stage. Other world leaders must be able to clearly understand what America’s priorities are and what it’s words and actions mean. Regardless of what President Trump may say American predictability is probably the most critical element of our international strategy to maintaining world peace and order.
Sadly what we now have in the White House to address these issues is a hateful divisive would be dictator who shows contempt for a free press, an independent judiciary, our national institutions, and the rule of law. Likewise on the world scene, international agreements and treaty obligations seem to mean nothing to Trump. He has abandoned the international climate accord; withdrew from the TPP; is threatening to leave the JCPOA (Iran nuclear deal); is dismantling the State Department; and seems ready and willing to initiate a trade war.
At the same time China, our strongest global economic competitor, is demonstrating itself politically savvy, economically stability, and is executing its own global economic development strategy. In short, China is stepping in to fill the world leadership vacuum Trump’s disengagement is creating. Meanwhile as popularly elected politicians did 85 years ago in Germany, Republican Congressional leaders are abandoning liberal democratic values to endorse the autocratic whims of this President. The future doesn’t look good for American democracy.