The fiscal challenges facing the United States are increasingly pressing, with potential solutions limited to raising taxes or cutting popular mandatory spending programs such as Social Security and Medicare.
Given that two-thirds of U.S. spending falls into politically sensitive categories, both options are politically unpalatable.
Failure to address the budget deficit promises the continuation of mounting debt interest, risking a loss of investor confidence in the United States and the U.S. dollar itself.
This fiscal neglect may lead the country toward a scenario of financial strangulation, whereby superficial remedies—such as tariff increases to combat the trade deficit—will not resolve the underlying economic issues.
Instead of addressing these challenges, the focus has often shifted to politically easier targets.
Raising tariffs to counteract the trade deficit is akin to trying to lift oneself up by the handle of a bucket; it may create inflation, which in turn could strengthen the dollar and reduce the demand for U.S. exports.
To effectively reduce the trade deficit, the nation should prioritize prudent fiscal management and a sustainable reduction of the national debt.
A long history of poorly planned economic policies has contributed to the current economic landscape.
The U.S. has endured decades of calling for deregulation under the painting of a free market solution, sidestepping significant real-world challenges.
It was clear that maintaining high U.S. wages while keeping tariffs low would jeopardize numerous low value-added manufacturing jobs in sectors like textiles and simple assembly work.
Yet, Congress fails to confront these harsh realities.
As factories have closed, displaced workers have struggled due to inadequate education, skills, and mobility.
While worker retraining programs could have provided a pathway for these individuals into new job markets, they were frequently thwarted, often due to opposition from Republican lawmakers.
Joblessness subsequently hampers consumption, breeding discontent and democratic instability.
Moreover, a lack of proactive strategies has reached workers in vital industries such as coal and steel.
Fracking offers cleaner, more competitively priced natural gas, thereby displacing coal as an energy source.
Instead of addressing this transition, political promises to ‘save’ the coal industry perpetuate falsehoods, blaming overregulation without acknowledging the industry’s decline due to broader market shifts.
The case for the steel sector is similar; industry job losses stemmed more from mechanization and compensation policies than from regulatory burdens.
Compounding these issues, recent policies from the Trump Administration threaten the foundational values upon which the United States has thrived.
The country’s success has historically leaned on talent from immigrants who leverage U.S. educational offerings and its entrepreneurial environment.
Current administration policies not only discourage the influx of such gifted individuals but also undermine the educational system that has long been integral to the nation’s status as a global leader.
Republican lawmakers largely align with an authoritarian governance approach that jeopardizes democratic principles, scientific integrity, independent media, and social programs.
Equality, public health, and democracy itself are at risk, fostering a climate of discontent that fuels the populist movements emerging in response to rising inequality.
The Trump administration exploits economic inequality as a tool for political gain, foregoing the American dream’s promise.
Statistics reveal stark realities; the World Bank’s Gini Index underscores high income inequality in America.
The U.S. ranks poorly in family income distribution, with a poverty rate standing as the second highest among OECD nations—around 11% of its population, or about 38 million Americans, live in poverty.
The OECD’s data from 2021 sheds light on this growing inequity, reporting the average relative poverty rate at 11.4% across OECD countries, yet distressingly higher at 18% for the U.S.
Countries like Czechia, Denmark, Finland, and Iceland boast poverty rates between 5-7%, starkly contrasting with the growing unrest in America, spurred by these inequalities.
This increasing disparity contributes to political discontent and jeopardizes social cohesion within the country.
In tandem, the erosion of democratic values brings about significant implications for both domestic stability and international relations.
The fiscal and political stability underpinning U.S. business success relies heavily on democratic institution integrity and separation of powers as mandated in the Constitution.
However, the Trump administration’s increasing dismissal of judicial authority and lack of adherence to constitutional mandates erodes confidence in the U.S. as a reliable business environment.
Lessons extend beyond U.S. borders; European nations must heed America’s current challenges with democracy, probability of rising deficits, and threats to competitiveness posed by radical political elements.
Strengthening national values means addressing the historical realities of discrimination in the U.S. and reinforcing the premise that all men are created equal.
Awareness of these challenges could help Europe create mechanisms to safeguard democracy against similar threats present in the United States today.
image source from：https://www.theglobalist.com/united-states-debt-budget-deficit-income-inequality-us-dollar-donald-trump-tariffs-democracy/
