Donald Trump’s presidential campaign slogan was “Make America Great Again!” For both the Chinese mainland and Hong Kong, America being “great again” is to be welcome and certainly not to be feared. We all want peace; we all want prosperity; we all want happiness. As long as we manage ourselves well, shared prosperity is entirely achievable.
In 2021, the World Bank published, under the Poverty and Shared Prosperity 2022 series, a report titled “Correcting Course”. If we do foolish things, we will all end up destroying ourselves. Not only humankind, but also other species, will cease to exist. That scenario is frighteningly close. Early this year, scientists moved the Doomsday Clock to just 90 seconds to midnight, “due largely but not exclusively to Russia’s invasion of Ukraine and the increased risk of nuclear escalation. The new Clock time was also influenced by continuing threats posed by the climate crisis and the breakdown of global norms and institutions needed to mitigate risks associated with advancing technologies and biological threats such as COVID-19.” Technology is moving ahead at a rapid pace. Humankind has become extremely powerful and extremely dangerous. Humankind needs to change course. This requires wisdom and resolve.
Here is some bad news that we need to face squarely. The Russia-Ukraine conflict is extremely destructive but is entirely unnecessary. It could have been avoided easily if NATO’s eastern advance had not taken place, but it did. NATO’s eastern advance since the unification of Germany started in 1999. Since then, 14 eastern European countries have joined NATO. The Warsaw Pact was dissolved in 1991. What is NATO’s reason for existence, and what is its reason for eastern advance? Has NATO contributed to world peace? If Ukraine had agreed to drop its application to join NATO, Russia’s “special military operation” would not have taken place. China has maintained that diplomacy is the only proper way to end the conflict. More importantly, China agrees that Ukraine’s sovereignty and territorial integrity should be respected. To stop the discrimination against the Russian population in Ukraine, however, perhaps Ukraine can take a lesson from the “one country, two systems” framework, so that the Russian population in Donbas and other regions feels better protected.
The US federal government’s total public debt stood at just under $31.46 trillion as of Feb 10, with the fiscal deficit still running high. The Congressional Budget Office now projects a federal budget deficit of $1.4 trillion for 2023, roughly 5.3 percent of GDP, and this is expected to rise further to 6.1 percent of GDP in 2024 and 2025 before declining. Debt service as a share of federal outlays had risen to more than 15 percent in the mid-1990s, but with falling interest rates this has come down significantly. The supremacy of the US dollar as the world’s safest and most liquid asset is behind this. The US has enjoyed the unique privilege of being able to borrow more cheaply when a crisis strikes. The sharp decline in Treasury yields after the Lehman Brothers’ demise is a case in point. But will this privilege last? Should America expect this privilege to last? Is this privilege well-deserved? Recently there has been a worldwide scramble for gold, whose price has risen to new highs. This bodes ill for confidence in the US dollar. If the world requires the US to pay more reasonable interest rates on its borrowing, the debt servicing cost would be too big to swallow.
Both former president Trump and President Joe Biden on their presidential trails had pledged to refurbish America’s infrastructure. Unfortunately, both presidents have been keener to pay for military spending than to pay for infrastructure and proper healthcare. On top of the Centers for Disease Control and Prevention’s scary figures about America’s declining life expectancy at birth to 76.4 in 2021, it was recently reported that in 2021, the US had one of the worst rates of maternal mortality in the country’s history. With 1,205 people dead from maternal causes in the US in 2021, maternal mortality showed a 40 percent increase from the previous year. This translated to 32.9 maternal deaths per 100,000 live births — more than 10 times the estimated rates of some other high-income countries, including Australia, Austria, Israel, Japan and Spain which all hovered between 2 and 3 deaths per 100,000 in 2020. Given the fact that the US spent 18.3 percent of its GDP on healthcare in 2021, these horrific figures suggest gross inefficiency and waste, probably implicating corruption and impropriety.
On Nov 6, 2021, the US Congress passed the Bipartisan Infrastructure Deal (Infrastructure Investment and Jobs Act). It acknowledged that in the US, 1 in 5 miles (1.6 of 8 kilometers) of highways and major roads, and 45,000 bridges, are in poor condition. The legislation promised to invest $110 billion in additional funding “to repair our roads and bridges and support major, transformational projects”. Yet derailments of trains have been occurring at an average of 1,704 per year from 1990-2021 according to the Bureau of Transportation Statistics. In 2023, several serious incidents have taken place, including the Norfolk Southern train derailment in East Palestine, Ohio, that involved very toxic chemicals.
Following the collapse of three banks in one week, there is an apparently impending financial crisis in America. Fixing the US’ problems requires money, strong will, and understanding of the real issues. Creating external enemies to divert public anger will not solve America’s problems. Hitting the nail on the head will.
The author is the director of the Pan Sutong Shanghai-Hong Kong Economic Policy Research Institute, Lingnan University.
The views do not necessarily reflect those of China Daily.
