THE AMERICAN BUBBLE ECONOMY

2025 AND BEYOND

To understand where we are today, we must examine where we've been. The policies currently championed by Trump trace back to Reagan, reinforced by George W. Bush Jr., and further expanded by Trump in 2017. These policies center on aggressive, consumption-oriented tax cuts favoring the wealthy and corporations. Let's take a historical perspective to see how well these approaches have worked.

In 1980, the United States was the world's largest net creditor—a position it had held since 1916. The middle class was strong, and American manufacturing was still the global leader, although it was beginning to face competition from developing nations, Japan, and Europe. Contrary to claims by some conservatives, the U.S. economy wasn't in ruins; poverty was not widespread, and the middle class thrived.

Fast forward to today, after decades of tax cuts benefiting the wealthy: how are ordinary Americans faring? Real U.S. wages, adjusted for inflation, are lower than in 1973 when they peaked. The inflation-adjusted minimum wage has dropped to 1953 levels. Meanwhile, 60% of Americans now live paycheck to paycheck.

Inter-class economic mobility in the U.S. is among the worst in the developed world.

Health care in the U.S. remains uniquely disastrous. Unlike most developed nations, America lacks universal health care. In countries with sensible health systems, individuals receive healthcare cards at birth, providing free care for life. These countries also offer paid sick leave, recognizing the societal risks of forcing sick workers to clock in and spread illness. In contrast, America's fragmented healthcare system became painfully evident during the COVID-19 pandemic, which killed over a million people and caused economic devastation. This crisis was exacerbated by Trump's dismantling of pandemic preparedness measures, including those meager preparations Obama put in place.

Even "affordable" plans like those under Obamacare are often impractical, with exorbitant deductibles—$8,000 or more—that are impossible to manage for people living paycheck to paycheck. Furthermore, restrictive enrollment periods create a total crisis, a system that would be absurd if applied to something like car insurance. Medicare cuts have further strained the system, with hospitals and doctors receiving reduced payments, leading to subpar care and patients being discharged prematurely. My own mother experienced this firsthand during a serious illness; she was repeatedly kicked out of the hospital because they were making so much less from her than they were from private insurers.

Turning to broader issues, most scientists agree on the reality of climate change and its existential threat. Meanwhile, Wall Street continues its familiar playbook of deregulation, echoing policies that led to the 2008 financial crisis. Current rhetoric around cutting "burdensome" regulations often lacks clarity, leaving us to wonder which safeguards are targeted—worker safety or environmental standards. These are both serious concerns.

The fiscal situation is equally grim. In 1980, the U.S. was a creditor nation. Today, it has a $20 trillion net debtor international position. Total U.S. debt (public and private) is at record levels as a share of GNP. The U.S. economy still loses a trillion a year in world trade. The federal budget is stretched thin, with discretionary spending repeatedly slashed since 1981 to accommodate tax cuts. Trump's proposed tax cuts and other promises, like eliminating taxes on tips, would widen this gap further, creating a fiscal hole that cannot realistically be filled. Claims of saving trillions remain vague and unsupported, particularly when most of the budget has already been declared off-limits for cuts. U.S. savings rates remain a joke by international standards.

China has replaced America as the world's largest economy, and key U.S. industries have been devastated.

Beyond the economy, Trump's appeal in 2016 stemmed from disillusionment with the political establishment.

Our social and economic problems are daunting. The U.S. spends more on health care as a percentage of GDP than any other country, yet Americans are among the least healthy in the developed world. Military spending has been at its highest since World War II, and global war spending is soaring.

The stark reality is that for 44 years, the U.S. has been heading in the wrong direction. If these challenges aren't addressed, they will resolve themselves in catastrophic ways, much like the fiscal meltdown that triggered the French Revolution. Solutions will come, but the longer we wait, the higher the cost—in lives, resources, and societal cohesion. It's time for the country to rise to the challenge and make the tough decisions to secure a sustainable future.

A serious healthcare plan needs to be put in place. The endless wars of our foreign policy "experts" need to end. Global war spending and global war must decline. New York City rose from the financial ashes of 1975. We can do it today. However, we see little interest in either party to do what is necessary.