Foreign appetite for US treasuries is collapsing.
We managed to turn an economy that used to make things into one of bankers, financiers, managers and HR apparatchiks. The United States is a service economy (77.6% as of 2021).
The global demand for our debt (enforced by the requirement that foreign trade occurs in US dollars) is the only thing that has propped up our ability to deficit spend year to year on such a staggering level. This foreign demand has allowed us to print money the way we have in the past to get out of national financial jams.
We are funding a war with currency and materiel against a state that never got rid of its cold war munitions capacity while we did. The US can produce about 24,000 155mm artillery shells a month now while back in the 90's that number was somewhere north of 800,000 (and certainly higher during the height of the Cold War).
While engaged in this proxy war, we are rattling our saber over the defense of Taiwan against an opponent that has become the manufacturing hub of the globe over the last 30 years. We won WWII by getting companies like Chrysler to retro fit their factories to make tanks and planes, and we had the ship building capacity to match. China has enough capacity to build 23,250,000 million tonnes of warships compared with less than 100,000 tonnes in the US. A staggering 232.5 x 1 discrepancy.
Birth rates across industrial society are collapsing for reasons both economic and cultural.
Arguing about our politics at this point is like discussing the drapes while Rome burns.
Our current political spasms, from Trump (or maybe 2008) onwards, can be seen as a growing intuitive public awareness that American life everywhere is getting worse. My generation at least were promised good jobs as long as you went to college and got a degree. I graduated college in 2008 and was slapped in the face with the fact that....
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Home ownership while at least a marginally attainable dream for my generation has now become a complete fantasy for the young. We are now in the most unaffordable housing market.... ever. Home prices are 560% of the average income with mortgage rates on a 30 yr hovering around 8%.
While not an immediate threat to national employment on a grand scale, AI LLM's will gouge job opportunities in the bullshit email jobs economy we've made for ourselves. This includes coding, law and anywhere that requires text or contracts written but no true originality. If you're writing the next great American novel I wouldn't be worried but if your job involves spreadsheets or sending forms back and forth or writing banal emails be worried.
In one of the greatest lies ever told, we convinced the American people that a college degree and higher education was the ticket to the good life, while the rigor and academic performance of our higher institutions languished... awash as they were with money that would never stop coming. We so fundamentally brainwashed our people that they would rather the pride of making 40k a year in an office at a computer than the dishonor of making 80k as a plumber or welder. The only thing that held this monumental bullshit jobs program afloat for so long was the free money of zero interest rate policy (ZIRP) and the huge hiring it allowed companies to undertake.
Now that inflation has finally struck, with foreign economies no longer willing to absorb the colossal number of treasury bills that make it all possible, and interest rates climbing at never before seen rates, the house of cards that is the Global American Empire is finally crumbling under its own weight.
We are rapidly losing the ability to turn on the money printers to fix the problem the way we have in the past. Its only a matter of time before we face a crisis that is beyond our diminishing capacity to surmount.
Social Security runs out of money in 2033.
There isn't going to be a universal basic income.... or trillions upon trillions for a green new deal. We will be lucky if we can find the money to maintain some semblance of the gov't systems of support we've got. If we can't keep such a politically potent program as Social Security afloat I'm not optimistic for much else. Old people do vote.
The good part about all this is that our government and those that run our economy will finally have to face the music. They've been able to play fast and loose with everything because of how successful we've been. Those past successes and the equity they've built in the American system have enabled the stupid profligacy we've seen. Congress has all but abjured its duty to govern meaningfully for the past 40 years to both the executive and legislative branches and more worryingly to the administrative state (via the Chevron deference). All of this will need to change in some fashion once the free money printer has run out of juice.
The bad part is that in the process 100's of millions of Americans will have to suffer mightily. And this process will take decades.
So we can argue politics, but in the face of this its kind of moot.
The only meaningful political question is who takes ownership of this colossal problem and who takes ownership of its solution.
