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The US debt ceiling crisis is once again provocative the usual comment about the alleged dysfunction of the country. But the truth is that this unprovoked, self-inflicted wounding madness is taking place against a backdrop of astonishing force.
The facts cannot be disputed. The United States has recovered from the coronavirus pandemic faster than any major economy in the world. Like Bloomberg’s Matthew A. Winkler recently pointed out, unemployment is surprisingly low. Gross domestic product growth has grown at three times the average rate under President Donald Trump, real incomes are rising, manufacturing is booming and inflation has eased. for 10 months in a row. Even the budget deficit, which was 15.6 percent of GDP at the end of Trump’s presidency, has dropped to 5.5 percent of GDP at the end of last year.
The picture is even better when viewed more broadly. The United States remains the world leader in business, especially in cutting-edge technology. Scholars Sean Starrs and Stephen G. Brooks Found that, looking at the world’s top 2,000 companies, Chinese companies rank first in global profit shares in only 11 percent of industries, but American companies rank first in 74 percent of industries .
Or look at artificial intelligence, which most agree is the new frontier of technology, likely to shape every industry. American companies such as OpenAI, Microsoft and Google they produce the best apps on the market, and a host of other new companies are emerging. As Paul Scharre points out in a Essay on Foreign Affairs, “Of the top 15 institutions publishing deep learning research, 13 are American universities or corporate labs. Only one, Tsinghua University, is Chinese.” He notes that while China publishes far more AI research than the United States, American papers are cited 70 percent more often. These American advantages are likely to grow dramatically now that China has been locked out of the advanced chips that are absolutely essential to developing and using AI.
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Or consider finance. Despite the recent banking crisis, the largest US banks are now more dominant than ever around the world. They have passed rigorous stress tests and built up their capital reserves, and as a result are now better positioned than their European and Japanese counterparts. China’s state-owned banks are loaded a large public debt and it cannot operate in the open global financial system because that would almost certainly cause massive outflows of funds as the Chinese people look to move their money to safer places. And despite many challenges and efforts to topple it, the dollar remains the global reserve currency (as the managing director of the International Monetary Fund). he said recently), which gives the United States a financial superpower. (It’s one I worry we’re misusing, which will lead to even more efforts to replace it. But there’s no denying that the dollar, for now, reigns supreme.)
A somewhat unnoticed development in recent years has been the rise of the United States as an energy power. Because of fracking and natural gas, the United States is now the world’s largest producer of liquid hydrocarbons. And like Jason Bordoff from Columbia University has pointed out, the United States’ ability to ship liquefied natural gas has made it an energy superpower, capable of providing or cutting off power to countries around the world. Add to these traditional energy sources the dramatic increase in green energy, thanks to the big rebates and tax incentives of the Inflation Reduction Act, and you have a picture of a complete and truly amazing energy capability.
The US military remains in a league of its own, far superior to its rivals in Russia or China. China is catching up with the United States, but the the lead is still great in many dimensions of war. And in Ukraine, as Republican foreign policy adviser Kori Schake has pointed out, the United States, at minimal cost and without American troops, is inflicting devastating damage on the Russian military. Washington is also transforming the Ukrainian military into the most powerful fighting force in Europe, giving it another powerful ally. The great force multiplier of US power remains its alliances. The United States has more than 50 treaty allies; china has one (North Korea). And it has approx 750 military bases of some kind around the world; China has it one (in Djibouti).
I could go on. Unlike most rich countries, the United States has a fort of working age cohort that will not decrease, thanks to immigration. We still take more 1 million legal immigrants per year on average. china i Russia both are facing a demographic decline that is almost impossible to reverse and that will slow down their growth in the long term.
Could it be precisely this backdrop of strength that allows Washington politicians—and the Republican Party in particular—to engage in this crazy political theater? For most countries, the price of playing games with one’s solvency would be high and severe, and this would act as a disciplinary mechanism. But in Washington, the country’s enduring strength has become a license for irresponsibility.
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