At a time when the overall power of the Russian Federation has been very greatly diminished by its failure to swiftly conquer Ukraine as all had expected and the overall power of the People’s Republic of China has been eroded by the cruel exposure of its broad technological limitations following some rather narrow U.S. export denials, while Iran’s immiseration, aggravated by adventurism, has deprived its regime of public support, even as Brazil and Turkey, once rising powers of great potential are stagnating, while North Korea’s boasts succeed one another without effect, and South Africa continues to decline into a failed state––why do many Americans believe that the relative power of the United States has greatly declined?

One reason is that they see countries once firmly in America’s camp, such as Turkey and far more significantly Saudi Arabia, closely cooperating with Putin’s Russia in ways that enhance its war-making capacity, the former by supplying it with embargoed equipment starting with microprocessors, and the latter engaging in joint output manipulations that increase Russian as well as Saudi oil revenues.

The Saudis, moreover, also cooperated with Xi Jinping’s pronouncedly expansionist China, enabling it to stride into the Persian Gulf in the prestigious role of the peacemaker between Riyadh and Tehran. This move automatically enhances Beijing’s influence from Kuwait to Oman, a swath of territory where only American influence had mattered before, ever since the British withdrawal in the last century.

That was the Saudi response after a new administration chose to breach the multi-generational U.S.–Saudi oil-for security pact by failing to provide prompt military support when the country came under attack from Iran’s minions. That the administration was plainly influenced by an American newspaper’s anti-Saudi campaign motivated by the killing of a reactionary polygamist and sometime columnist, only aggravated the slide in U.S. influence.

There are some who especially rejoice in the spectacle of a weaker United States, not only because they are inflamed by the envious and resentful anti-Americanism that once characterized much of the intelligentsia from London to New Delhi, but because they see it as vindicating their very prolonged wait for the advent of multipolarity, to them a blessed condition under which countries such as Brazil, India, and South Africa would finally join China and Russia in deciding the overall direction of world politics, along with a greatly diminished United States and its increasingly bedraggled ex-imperial British and French partners, whose global power of yesteryear––now shrunk to chairs in the decreasingly relevant UN Security Council, and nuclear weapons that cannot be more consequential than those of Russia in its Ukrainian predicament––that is, not really consequential at all.

Finally, there is the new fragility of the U.S. dollar’s role as the world’s reserve currency, itself a very major component of overall U.S. power. Its cause is not the rising percentage of world trade that starts or ends in China—Sterling’s role as the world’s currency was undiminished by the relentless rise of German global commerce till 1914.

It is instead the daily spectacle of U.S. politics in Washington that weakens the dollar’s perceived value, for in Congress it is only the exceptional few who show any awareness of the material benefits conferred by the dollar’s role as the world’s reserve currency, and the consequent imperative of preserving that exorbitant privilege by fiscal prudence at all times, and strict public-spending restraints whenever necessary.

Rather than the needed fiscal discipline, the world sees U.S. politicians competing with one another by proffering new expenditures, including increased military spending with no added efforts to improve the ways the money is spent; countless localist, sectoral, or national initiatives at public expense; and the ever-increasing, so-called “non-discretionary” expenditures, mostly transfers to individuals under various headings that could in fact be decreased, but are instead only increased, with all those vast expenditures financed by increasing the public debt whenever collected tax revenues fall short, as they usually do.

With the public debt having long-since passed the 100% of GDP mark, that most minimal standard of fiscal prudence, instead of the emergence of a determined strong-dollar party––as was the case with Sterling, whose demise was successfully delayed for three generations till the end of the Second World War––in the United States the very opposite has happened.

When the newly installed administration hurriedly decreed in 2021 almost two trillion dollars of distributions to agile claimants to meet supposed pandemic needs––with no suggestion of how two trillion dollars of additional tax revenues might be collected to prevent an inflationary tide–– instead of vehement opposition, there was widespread acceptance. Milton Friedman’s irrefutable observation that inflation is always and everywhere caused by government money-creation was duly evoked, only to be ridiculed by the likes of the New York Times’s in-house Nobel laureate who dismissed the notion that the effect of the nearly two-trillion-dollar handout might be inflationary, given the deflationary effects of the pandemic. It was then that MMT, “Modern Monetary Theory,” briefly emerged and provided a theoretical justification for any and all government expenditures to satisfy all needs old and new, including the abolition of poverty altogether, because the U.S. dollar was the world’s reserve currency, so that if overall U.S. demand exceeded overall U.S. supply, imports would arrive in corresponding measure to prevent inflation.

That the overall thrust of these arguments—if not their indefensible illogic—was accepted by the powers that be is irrevocably proven by the reaction of the Chairman of the Federal Reserve when inflation did emerge with a 5% spurt, even before the near two trillion dollars of additional spending added its fuel to the flames (and when that colossal act of imprudence could still have been stopped): on June 22, 2021, in response to Republican calls for spending cuts, Chairman Jerome Powell declared that inflation was “temporary” and would soon “wane,” adding the technical observation that there was no danger of inflation because there were no “inflationary expectations.” Those reckless words immediately prompted de-dollarization moves by the prudent around the world, including some central banks. But in the United States, Powell’s declaration was not challenged in elite circles—none recalled the famous Chico Marx precedent: “Who you gonna believe, me or your own eyes?” memorably spoken when Chico, impersonating Groucho, outrages staid Margaret Dumont in the ingenue Gloria Teasdale role. But the joke is on us, because Chairman Powell is still in office as this is written, even as inflation exacts its especially cruel tax on the poor while eroding global confidence in the U.S. dollar. That is a great pity because only a convinced advocate of fiscal discipline can have the credibility needed to dowse the inflation expectations that now further propel inflation.

What is most damaging in this predicament is the obliviousness of all but a very few of the protagonists of U.S. politics. As the world waits to hear what Americans will do to restore the credibility of their governance, starting with fiscal discipline, of course, what they hear instead are calls for vast new expenditures.

Some are prompted by the quixotic attempt to control the planet’s temperature unilaterally, so that in the U.S. costly energy-use subsidies and even more costly energy-use restrictions proliferate, while in China and elsewhere new thousand-megawatt coal-fired power stations are inaugurated every other week.

Other newly proposed expenditures are meant to pay for more transfers to politically favored categories, of which the largest in scope is the proposed payment of reparations for slavery, an idea that has already been quantified at a million dollars per capita, or some 41 trillion dollars without counting administrative expenses, an amount that exceeds the total value of all quoted U.S. companies.

Fiscal improvidence could not by itself prejudice the upkeep of a satisfactory military imbalance between the U.S. and its prospective antagonists so long as the U.S. economy was much greater than theirs combined, as was true throughout the Cold War.

But now the economy of the People’s Republic of China is greater than the U.S. economy by the more relevant purchasing power criterion, and there is little prospect of narrowing the gap in the respective growth rates given all the impediments and distortions imposed by environmental and diversity mandates. Much fiscal discipline will therefore be required to adequately fund the armed forces and U.S. diplomatic action, including targeted aid, while there is as yet no sign of the intelligence reform and re-organization that could reduce expenditures while enhancing performance (nobody needs 18 different intelligence agencies and organizations).

Given this catalog of deficiencies, only one thing makes it perilous to forecast the future balance of power between the U.S. and its antagonists: the peculiar character of the U.S. political system.

No doubt because the establishment of the United States was preceded by only two functioning republics, which moreover were universally viewed as idiosyncratic whereas monarchy, by contrast, was the global norm, its federal government was designed as, and remains, a limited-term constitutional monarchy, whose particular effectiveness in specific endeavors is necessarily affected by the particular qualities and deficiencies of the temporary monarch and of his chosen entourage.

For that reason alone, the sum total of the actual power of the United States in world affairs has varied greatly and abruptly in the wake of presidential elections, definitely much too quickly to be explained by any set of discernable “objective trends.” In recent times, the Carter–Reagan non-sequitur disappointed the malevolent and invigorated America’s friends around the world with enduring effect, definitely changing the global balance of power quite radically, not because power was created ex-nihilo by Reagan, but because of Carter’s success in drastically reducing American power by very Christian acts of renunciation.

Today also there is a potential for an abrupt change in the balance of power in any direction, given the radical currents in American politics on one side, and China’s autistic foreign policies on the other, which have assembled for the United States a winning coalition that only awaits a leader.

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