The USA is currently considering its budget for the next six months. The proposed plan increases spending on the military (already the highest in the world by a wide margin) and security and cuts spending on almost everything else. Less is going to be spent on international diplomacy and aid. The big bone of contention is funding for the wall against Mexico. It seems that the USA must be frightened of something and is organising itself into an armed camp.
I was recently listening to some Elvis Presley music. This was a nostalgic experience. It took me back to the days when the USA was thought of as a bright, friendly, open-hearted country that had grow rich and progressive by having an open door to the rest of the world and, though perhaps in a slightly naive way, was busy exporting its idea of liberal culture to the rest of the planet. In those days we all knew that good new things started in California, got to New York the following year and Europe five years later. The USA meant hope and cheer to people in many part of the world.
How things have changed! Now the USA feels, to increasing numbers of people around the world, to be on the defensive and no longer a friendly place. How has this happened?
1. In part it is a natural effect of changing relativities. Seventy years ago the world was still recovering from a terrible war and the USA stood out as an undamaged haven of peace and benefactor of the former combatants. A new world order was established with the USA in a leading role. Then, along came the Cold War. This cemented the post-war structure into place. Although the US lost some wars - Vietnam most notably - much of the world continued to see the USA as the good guys versus the bad communists. These two factors have gone. Europe and China have recovered economically. The US now has real competition.
2. Being in the top dog position, the US invested heavily in its military. This has become its habitual resort whenever things seem to be going wrong or change is in the air. Shortly after the fall of the Iron Curtain, when almost every other country had reduced its defense spending, the US was accounting for almost half of all military spending on the planet. It still accounts for about 40% even though the US has only 5% of the world's population. Even Russia which has about twice as much land area to defend only spends about an eighth as much as America. What do they need all those guns for? Basically, this is the way that 5% of the world's population keeps itself as the dominant nation on the planet. However, this is very costly which means both (a) it is a great drain upon the country and (b) the US has to rely upon money sucked in from other countries, most of it as debts that may never get repaid.
3. Following on from the last point, the US government gradually gets more and more in debt. In the long run this is unsustainable, but getting out of such a position is extremely painful as numerous other countries - look at Greece - have found. The most recent figure I can find for the interest that the US pays on its debt in a year is 432,649,652,901 dollars and twelve cents - that twelve cents could be the straw that breaks the camel's back. However, this has become a "too big to fail" situation. The knock on effect upon other countries if the US went bankrupt would be so devastating that it seems to be in everybody's short term interests to keep the game playing for as long as possible. There is, however, here, surely, a disaster in the making. Of course, this debt situation is an important element in the background to the current budget. Trump is a businessman and he knows from personal experience what happens when you can't find the money to pay your bills. At one stage he had to sell off almost everything he had got. The US might get to that point. Somebody in Arabia would probably pay a decent price for the Statue of Liberty after it has ceased to mean anything. Trump, I imagine, can see such trouble hovering like a dark cloud on the horizon.
4. Then, of course, behind all this, there is the ecological problem. At an even deeper level than the problems outlined in the first three points, there is the fact that ecological degradation is creating problems while depletion of resources is making them harder to fix. This is not just a problem for the USA, but it is greater for the USA because the lifestyle of Americans has a higher eco "footprint" than that of most other countries. If there is a big collapse it is this factor that historians of the future will highlight as having been fundamental, no doubt.
What are the spiritual lessons? "Pride comes before a fall," my mother used to say. It is difficult to stay at the top. The means one has to resort to in order to maintain one's status gradually erode all the goodwill that got you there in the first place. Better to have been more modest from the beginning. In the Tao Te Ching it says that wise rulers make no show and do not lord it over people. They count their blessings and act discretely and generously. In Buddhism, we say that everything is impermanent. When the winds of change come one has only one's accumulated karma to rely upon. Woe betide if that karma is not good. Other religions all have similar messages. There is a definite sense that the world system is under stress at the moment. Cracks are showing. How long will it hold? Each little thing - like the US budget - can give us clues.
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Sticking my neck out, since predicting the future is always hazardous, I do fear that Trump's economic plan may prove to be a fiasco. Cutting taxes while increasing expenditure is always popular in the short run, but it is unsustainable and in the USA it is much easier to do both those things then to do their opposites for which there is always substantial opposition. The situation could easily get completely out of hand. He is counting on a level of economic growth which may well not materialise - I personally do not think that it will materialise because, like populists everywhere at the moment, he is ignoring the fundamental that have generated present levels of prosperity - free trade, international co-operation, foreign investment, cheap immigrant labour, and so on. Falling back on making everything home produced will push up costs and leave some big holes.
Also, arguing with trading partners about terms of trade (eg. currently, milk, with Canada; cars with Germany; etc) even if you win the individual battles (and you won't win them all) damages the relationship with these countries, many of whom are creditors of US. All in all it looks like a recipe for bankruptcy. He is planning to increase American debt substantially, but how long are creditors going to wear that if one is arguing with them all the time? America acts as though it were immune to economic fundamentals. To some extent it is because it can lean on other countries militarily, but there are limits. Eventually a day of reckoning must come and Trump's policies look likely to bring that day closer sooner.
It is all part of a fallacy that is currently widespread. Marine Le Pen in France is saying, in essence, that if we get rid of globalisation then we can prevent factories being moved from France to Poland. This is true, but what is being overlooked is that without international capital, the factories would not be there in the first place. Trump, similarly, thinks that if the US acts selfishly it can profit from doing so, but the USA does not exist in isolation, it lives substantially on other people's money.
The US might finally achieve a "soft landing" if the world were to gradually move over to a different system for international trade - perhaps even a return to the gold standard (USA has lots of gold, after all), but it would gradually lose its number one status. We would move to a "multi-polar" world. Personally I think this is inevitable, but it is a question of whether it happens gently and progressively or by a crash. The latter is likely because of the improbability that a US government of either party would be co-operative in unwinding its top dog position. At the same time, I guss that they can see trouble coming - hence the military build up.
Two of Trump's main strategies for balancing his budget are (a) a hope that increasing GDP will bring in more taxes on lower rates (Reagan tried to do this, but failed - will Trump do better?) and (b) pushing for repatriation of money that Americans hold overseas. This latter may help balance the budget, but it is another sign of gradually increasing isolationism and defensiveness. Trump may well get a growth in GDP and so appear successful for a time, but it will probably not be enough and all the while the debt pile gets bigger and bigger. It is a bit of a catch-22 problem: he wants to maintain US living standards while retrenching to a more sustainable position, but the two goals may be incompatible. It is a bit like the (supposedly Irish) joke about a car stopping and asking a passer-by for direction to a certain destination and the pedestrian replying, "Well, I wouldn't start from here."