Trump will likely win – but won’t make America great again

Overview

Donald Trump will likely defeat Joe Biden at the American presidential election on 5 November. One major reason is well-known but not, in some mainstream media outlets,  widely-publicised: for the past several months, multiple organisations’ polls have indicated that he holds decisive leads in five of the seven “battleground” states (Arizona, Georgia, Nevada, North Carolina and Pennsylvania; Michigan and Wisconsin lean to him but they’re too close to call).

If no “safe” state changes hands, these “swing” states will deliver to Trump a comfortable victory (ca. 290-240) in the Electoral College.

Yet opinion polls have occasionally been spectacularly wrong. Indeed, Trump’s victory in 2016 provides one of the most prominent examples. A second factor should therefore buoy him and disquiet Biden: people who’re willing to wager their own money tend to be more prescient than those who merely express an idle opinion – and since last October they’ve mostly and increasingly reckoned that Trump will triumph this November.

More generally, the RealClear Politics Betting Average indicates that over the past 18 months Trump’s odds have relentlessly improved. But trends can be fragile and nothing in politics is inevitable.

Most recently, immediately after his conviction on 31 May Trump’s probability of victory slumped to 47.7% and Biden’s lifted to 39.2%. A week later, however, Trump’s rebounded to 50.3% and Biden’s sagged to 35.5%. By 18 June, Trump’s odds continued to improve (to 52.5%, above their level before the verdict), and Biden’s crashed to 33.3% (well below their pre-verdict level).

Trump’s lead thus remains substantial – and Biden’s chances low and stagnant– in the six betting markets that RealClear Politics tracks.

Why will Trump likely defeat Biden? I focus upon a third development which everybody else is apparently ignoring: the mostly gradual but cumulatively drastic shift of one of American society’s tectonic plates. Since the 1990s the percentage of its residents who’re “dissatisfied with the way things are going in the U.S.” has soared, and the percentage who’re satisfied has plunged.

Over the past 20 or so years, however, Americans were least displeased with the country’s direction during Donald Trump’s presidency – and throughout Joe Biden’s they’ve become more discontented than at any time since Jimmy Carter’s one-term administration (1977-1981).

Why will a second Trump term, if it eventuates, probably fail? For the same reason that he’ll likely defeat Biden, and that a re-elected Biden administration would (as the first one has) also flounder: the state of the nation increasingly displeases Americans. The inflection point seemed to occur during George W. Bush’s first term (2001-2005). Not since Bill Clinton’s second term (1997-2001) has the U.S.’s course contented a majority of its residents; moreover, since then discontent has generally grown during each successive presidency.

How can that be? How over the past quarter-century has electoral politics in America frustrated a rising tide – and now a large majority – of Americans? My answer will probably surprise and disconcert most people.

Gallup’s “Direction of Country” Poll

Occasionally beginning in 1979, during most months since the mid-1980s and in practically every month since the early-2000s, Gallup, Inc., the public opinion and polling firm founded in 1935, has asked a random sample of American residents aged 18 or older: “in general, are you satisfied or dissatisfied with the way things are going in the United States at this time?” Other reputable polling firms ask similar questions, but Gallup’s series of polls is by far the longest. Figure 1 summarises its results.

Most importantly, the percentage of satisfied Americans has tended to fall, and the percentage of dissatisfied ones to rise, over the past 45 years. Never since 2002 have the satisfied outnumbered the dissatisfied. This discontent long predates Donald Trump’s presidency; obviously, he didn’t create it.

Figure 1: Percentages of Americans Satisfied and Dissatisfied “with the Way Things Are Going,” 1979-2024

The percentage of dissatisfied poll respondents has averaged 33%. Moreover, with only a couple of exceptions in 2019 – that is, during Trump’s term – since 2005 a significant majority (60% or more, and as many as 80% as recently as November 2023) of Americans have been discontented. Five more specific results are also apparent:

1. The percentage of satisfied respondents fluctuated greatly, from ca. 20% to more than 60%, during the two decades before the turn of the century.
2. From ca. 2000 until the nadir of the Global Financial Crisis (GFC), the satisfied percentage steadily and cumulatively drastically fell, reaching an all-time low of 7% in October 2008.
3. From the GFC until the COVID-19 crisis and panic, satisfaction rose, reaching a post-GFC maximum of 45% in February 2020.
4. Since then, the satisfied percentage has decreased; it’s averaged 22% and sagged as low as 13% in June 2022. Figure 2, which plots the moving average of 12 polls, reveals points 1-4 more clearly.
5. The dissatisfied percentage is a near-mirror image of the satisfied one. In other words, very few people (an average of 2.5% of each sample) have expressed no opinion to Gallup in response to its question.

Figure 1 and Figure 2 thus contain four inflection points: the biggest one occurred shortly after the turn of the century; the others occurred at the height of the GFC and COVID-19 crisis, and the recession of the early-1990s. 

Something happened at these junctures which caused enduring changes in the percentage of Americans which is (dis)satisfied with the country’s direction.

Figure 2: Percentages of Americans Satisfied “with the Way Things Are Going,” 12-Poll Moving Average, 1984-2024

Figure 3 plots the average percentage of satisfied respondents to Gallup’s surveys conducted during the term of each president since 1979 (“Reagan I” denotes the first term of the Reagan administration, “Reagan II” its second term, and similarly for the other two-term presidents).

Figure 3: Average Percentage of “Satisfied” Respondents per Presidential Term, 1979-2024

Five points are most noteworthy:

1. The average percentage of satisfied respondents across all presidencies is 34.3%. On average, in other words, almost two-thirds (64.2%) of respondents have been “dissatisfied with the way things are going in the U.S.”
2. Under only two presidents – during Ronald Reagan’s and Bill Clinton’s second terms – did the country’s direction satisfy an average of 50% or more Americans.
3. Levels of satisfaction generally rose from the Carter to the second Clinton administration; since then, the overall trend has been downwards, and since George W. Bush’s second term the level of satisfaction per administration has continuously been below-average.
4. Also since W’s second term, Americans were least dissatisfied with the country’s direction during the Trump presidency.

In other words, a higher percentage of Americans reckoned the country was on the right track under Donald Trump than during George W. Bush’s second term, both of Barack Obama’s, and Joe Biden’s. Trump inherited considerable discontent, and during his tenure it mostly abated. The fifth point, then, is that during Biden’s time Americans have been unhappier with the country’s direction than at any time since Jimmy Carter’s term.

An American president (or his vice president, if he dies in office or is removed from office) serves a fixed four-year term. The first month of a term is in January of its first year, the second month is in February, ... and the final (forty-eighth) month is the December of its fourth year. A two-term president therefore holds office a total of 96 months.

The biggest inflection point of Americans’ satisfaction with their country’s direction occurred just after the beginning of this century. I’ve therefore compared the percentage of Americans who are satisfied “with the way things are going in the United States at this time” during the first, second, ... and forty-eighth (and, for two-term presidents, foery-ninth to ninety-sixth) month of each presidency between George H.W. Bush’s single term of office and George W. Bush’s second term. Figure 4 plots the results.

Figure 4: Percentage of “Satisfied” Respondents per Month of Three Presidents’ Terms 1989-2009

When the elder Bush entered the White House (month 1), the percentage of Americans satisfied that the country was headed in the right direction was 45%. Perhaps as a consequence of the first Gulf War, it zoomed from 30% in month 22 to 66% in month 27; but likely as a consequence of the recession of the early-1990s, it soon surrendered all of its gains and collapsed as low as 14% in month 42.

In the first month of Clinton’s presidency, fewer than 30% of Gallup’s respondents agreed that the U.S. was heading in the right direction. That percentage remained mostly stable throughout his first term (months 1-48); but seemingly as a result of the strengthening economy, booming stock market and the budget’s first consecutive years of surplus since the late-1940s, it bolted as high as 71% in month 74 and averaged 60% during the remainder of his presidency (months 75-96).

Bill Clinton is thus the most recent president – and only one since Ronald Reagan – whose “country moving in the right direction” score was higher at the end than at the start of his time in office.

When George W. Bush entered the White House, the country’s direction satisfied almost one-half of Americans. This percentage zoomed to almost 70% immediately after the attacks on 11 September 2001 and the American counterattack in Afghanistan in October (months 10-12), but collapsed to 36% by month 27. It rebounded to 55% – not as high as in 2001 – in month 28 (Anglo-American invasion of Iraq), but towards the end of his first term, perhaps as a consequence of the Dot Com bust and recession, was lower (37%) than when he took office. And during his second term (months 49-96) the percentage slumped almost continuously.

A couple of months before W passed the baton to Barack Obama (in December 2008 (month 94), which was close to the nadir of the GFC), just 10% were satisfied – which was an improvement on the 7% in October!

What caused Americans’ satisfaction with the country’s direction, which rose under Bill Clinton, to collapse under George W. Bush? I’ll provide a preview now and details later. Clearly, the implosion of the Dot Com Bubble (and resultant recession) as well as the GFC (and resulting recession) didn’t help; nor did the insurgency in Iraq.

The main culprit, I suspect, is that during W’s two terms – and well before the GFC, which exacerbated the problem – the Republican Party abandoned its last remaining vestiges of fiscal discipline. “Reagan proved deficits don’t matter,” W’s vice-president, Dick Cheney famously boasted. Where the Republicans led the Democrats enthusiastically followed.

If the inflection point of satisfaction with the country’s direction occurred during George W. Bush’s second term, its cause was the political class’s abandonment of fiscal discipline – and thus of sound policy and rising living standards.

Before I elaborate and justify that explanation, let’s consider the impact of that change upon Americans’ attitudes. For each month of each presidency since George W. Bush’s first term, I compared the percentage of Americans who are satisfied “with the way things are going in the United States at this time.” Figure 5 plots the results.

Figure 5: Percentage of “Satisfied” Respondents per Month of Four Presidents’ Terms 2001-2024

Although the percentage of satisfied Americans was relatively stable during Obama’s two terms, it was nonetheless lower (average of 24%) than during Bush’s two terms (39%). Moreover, the percentage was much lower during Obama’s first term (mean of 22%) than Bush’s (49%); it was also lower during Obama’s second term (26%) than W’s (29%). On two occasions it fell below 20%, and would have ended there if not for the burst to 29% during the months before Obama left office (which is probably attributable to Donald Trump’s election).

During most of Trump’s presidency, like Obama’s, the country’s direction satisfied a relatively stable percentage of Americans. Yet the percentages were significantly higher during Trump’s term (average of 30%) than either of Obama’s.

As late as month 37 of Trump’s term (February 2020), the percentage remained at 37% and had never fallen below 30%. However, by July 2020 (month 43) and probably as a result of his administration’s reaction to COVID-19, it collapsed to 19%. It recovered to 29% in October (month 46) but sagged to 21% in December (month 48). As a result, during the Trump administration the percentage of Americans satisfied with the country’s direction fell by 16 percentage points (more than 40%).

Yet the percentages during all but the last few months of Trump’s presidency handily exceeded their counterparts during the Biden administration.

When Biden took office (January 2021), the percentage was 25%. By May (month 5) it had risen to 35%, but then slumped as low as 16% (month 17). Since then it’s risen as high as 23% but averaged 20%. Hence Biden began with a very low percentage – and it’s sagged further under his watch.

Figure 6: Percentage of “Satisfied” Respondents per Month during Four One-Term Presidents’ Administrations

A fall of the “satisfied” percentage to ca. 20% has been associated with the failure of three presidents – Carter, George HW Bush and Trump – to win second terms (Figure 6). During their final year of office, but not necessarily the final months of their terms, the percentage sank to ca. 20% (Trump) or less (Carter and Bush).

This “death zone,” which Biden breached in months 14-20 and again in months 26-38 (which is much earlier and longer than Bush, Carter or Trump), should greatly concern him and his supporters.

Why Have Americans Become So Dissatisfied with Their Country’s Direction?

Since the turn of the century, and aided and abetted by the Fed’s artificially-low rates of interest and mass purchases of government bonds (“monetary stimulus”), American politicians have thrown ever-greater and cumulatively colossal quantities of sand (“fiscal and monetary stimulus”) into the U.S. economy’s gears. During and since the GFC, the U.S. Government has expanded – and undertaken much more mammoth expenditure relative to the size of the economy – than at any time since the Second World War.

As a result, and adjusted for CPI (which, given the frenzy of public spending induced by the COVID-19 panic, zoomed to a 40-year high), per capita income’s rate of growth has dwindled. In short, politics-as-usual in the form of an orgy of deficit and debt financed government expenditure has enriched a few special interests but harmed the general interest.

This development suggests a more fundamental economic reason for Americans’ rising and now high level of dissatisfaction with the country’s direction (there are surely non-economic ones as well). On the one hand, and as a Mount Everest of historical and theoretical evidence demonstrates, capitalism is just: it promotes the general interest (liberty and prosperity) but advances no special interest.

Politicians, on the other hand, succeed by attracting votes; and they amass votes (and the money which buys votes) by promoting certain special interests which privilege some people and penalise others.

The problem is that politicians’ advancement of one special interest harms other sectional interests – as well as the general interest. Politicians thus promote favoured minority interests at the expense of the general interest. Politicians have many “friends” (that is, financial backers) among privileged special interests, but capitalism has few if any friends, and many enemies, among politicians. Capitalism and the general interest it fosters, in other words, have no political constituency.

Hence the irony: Americans elect politicians whose actions benefit a minority but damage the country’s general interest (liberty and prosperity). Even more ironically, in response to the injury politicians cause voters re-elect them or replace them with others who wreak even more harm. A vicious circle ensues.

In order to cosset favoured interests, politicians enact myriad complex laws and spend vast quantities of money. With these funds the government hires bureaucrats; and with this legislation and money, politicians and bureaucrats cosset special interests. Politicians don’t spend their own money – they spend taxpayers’ money. Nor do they cut some categories of spending in order to boost others: “austerity” disturbs far too many sleeping dogs. It’s far easier to bloat the entire budget, and politicians do so by raising taxes. They can either raise taxes today or at some point in the future.

That’s a no-brainer: politicians almost invariably raise tomorrow’s rather than today’s taxes. The pleasure to favoured special interests is thus immediate; and the pain to taxpayers is deferred.

How do politicians raise tomorrow’s rather than today’s taxes? By borrowing: today’s loans generate the payments of interest to bondholders (taxes) which the government must pay tomorrow and into the future – by borrowing even more! Not since 1997-2000 – during Bill Clinton’s second term, a time, it’s worth noting, when the country’s direction satisfied an historically high percentage of Americans – has the U.S. Government’s incomings exceeded its outgoings (Figure 7).

Figure 7: U.S. Budget Surplus (Deficit) as a Percentage of GDP, 1979-2023

Why, ultimately, is deficit spending immoral? It benefits a minority now but eventually punishes the majority – many of whom are too young to vote for today’s deficits. Why are balanced budgets and surpluses beneficial? Morally, they promote “generational equity.” Empirically, they force governments to prioritise – that is, to focus upon high priorities and abandon low ones – and thus increase the quality of spending.

Alas, over the past 20 years – a period, as we’ve also seen, of rising dissatisfaction with the country’s direction – massive budget deficits haven’t merely become the norm. The deficits incurred during the GFC and COVID-19 crises were, as percentages of GDP, by far the largest since the Second World War. The most recent deficit (6.2% in the year to January 2023) – a time, the Biden administration has repeatedly boasted, of economic boom – is not only much bigger than the ones during the recessions of the 1970s, 1980s and 1990s; it also exceeds those during the Great Depression.

Even worse, nothing much is likely to change: the Congressional Budget Office foresees deficits between 5.2% and 6.3% of GDP each year over the next 10 years – that is, regardless of whether Trump or Biden wins, and of whoever succeeds him.

The consequence has been an upward spiral of indebtedness: the U.S., Government’s total debt (that is, the sum of its budget deficits over the years) now exceeds $34 trillion and 120% of GDP. Including commitments to Social Security and Medicare, total liabilities top $200 trillion; that’s about twice the size of the world’s GDP. Expressed as a percentage of America’s GDP, the U.S. Government’s debt has trebled since the 1960s (Figure 8). It fell in the last years of the 20^th century – when the country’s direction satisfied half or more of Americans – but climbed rapidly as a result of the GFC and COVID-19.

Figure 8: Ratio of Total U.S. Public Debt to GDP, Monthly, January 1966-January 2024

“For over a decade,” writes Kenneth Rogoff, professor of public policy and economics at Harvard University (“The End of Magical Debt Thinking,” Project Syndicate, 29 April), “numerous economists – primarily but not exclusively on the left – have argued that the potential benefits of using debt to finance government spending far outweigh any associated costs. The notion that advanced economies could suffer from debt overhang was widely dismissed, and dissenting voices were often ridiculed.”

Yet economic orthodoxy – not to mention common sense – has long maintained “that very high debt levels can impede growth, both by crowding out private investment and by narrowing the scope for fiscal stimulus during deep recessions or financial crises.”

“Until recently,” Rogoff notes, “any suggestion of fiscal prudence was quickly dismissed as ‘austerity’ by economists on the left. But with higher interest rates fast becoming the new normal, the idea that any economic problem can be solved with more government borrowing has become untenable.” Jim Chalmers, are you listening?

Since the 1970s the U.S. Government’s debt as a share of GDP has trebled (Figure 8), whereas the economy’s rate of CPI-adjusted growth, expressed as five-year and ten-year compound annual growth rates (CAGRs), has halved (Figure 9). These two developments are not unrelated.

Figure 9: CPI-Adjusted GDP Growth, Five- and Ten-Year CAGRs, January 1952-March 2024

Growing numbers of voters seem to grasp this relationship, at least roughly, and perhaps a few politicians do, too – but the latter will never publicly admit it: they’ll never concede that politics as usual (tax-and-spend, and resultant ballooning deficits and exploding debt) hasn’t merely enriched certain special interests; it’s done so at the long-term expense of America’s and Americans’ general interest (Figure 10).

Notice, however, that the rate of growth of CPI-adjusted per-capita income was strongly upward during the late-1980s, the 1990s and 2015-2020 – times when Americans’ satisfaction with the country’s direction was high or at least stable.

Figure 10: CPI-Adjusted Disposable Personal Income per Capita, Five-Year CAGR, January 1964-April 2024

Rogoff concludes: “while some might argue that countries can simply grow their way out of high debt, citing the United States’ postwar boom as an example, (research which Rogoff cites) ... refutes this notion ... The bad news is that in today’s economic environment, characterized by inflation targeting and more open global financial markets, these tactics may no longer be viable, necessitating major adjustments in U.S. fiscal policy.”

I strongly agree that “major adjustments in U.S. fiscal policy” are necessary. Yet neither Biden nor Trump, or their respective parties, show the slightest sign that they’re going to undertake even minor adjustments – never mind major ones. In that sense, bipartisan consensus prevails!

“To be fair,” Rogoff adds, “there is also no need to panic about public debt, at least in advanced economies (see also America’s real debt crisis, 15 May 2023). “Occasional bouts of high inflation or extended periods of financial repression are not catastrophic.”

“But it is important to emphasize,” he concludes, “that while wealthy people have access to a range of investment options that enable them to cushion the impact of such financial adjustments, low- and middle-income citizens tend to bear the brunt of the costs” (see also America’s permanent recession: Is it coming to Australia? 19 April 2022).

Conclusion and Implications

The explosion of debt-financed government spending, under both Republicans and Democrats and particularly during the GFC and COVID-19 panic, has benefitted a minority but harmed most Americans – including virtually all people of modest means. In particular, as a result of this “stimulus” (which is actually poison), economic growth and CPI-adjusted per capita income have stagnated. Unsurprisingly, over the past quarter-century America’s direction has increasingly displeased its residents. 

This rising tide of discontent, in turn, explains why betting odds and relevant opinion polls favour Donald Trump in November. Yet whoever wins will probably fail because America’s most fundamental problems – I’m tempted to say delusions – remain undiagnosed. The U.S. certainly retains important strengths; yet if its problems and weaknesses remain unaddressed then they’ll continue to worsen, and eventually become irreversible.

What are these delusions? For my purposes (and for the sake of brevity) one will suffice: almost everybody believes that the U.S. is a democracy, but it isn’t: it’s a plutocracy. Donald Trump’s enemies fear and loathe him not because he’s a threat to democracy (he can’t threaten what doesn’t exist), but because he menaces the special interests that enrich his haters.

Analysis by the thoroughly mainstream Martin Gilens and Benjamin Page, academics at impeccably establishment universities (Princeton and Northwestern respectively) draws a startlingly heretical – from a mainstream point of view – conclusion: “… economic élites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence” (see “Testing Theories of American Politics: Elites, Interest Groups and Average Citizens,” Perspectives on Politics, vol. 12, issue 3 (September 2014), pp. 564-581).

In plain English, America’s political system favours “insiders” and penalises “outsiders” (see also Nick Cater, The Lucky Culture and the Rise of an Australian Ruling Class, HarperCollins, 2013).

Lawrence Lindsey concurs. He’s a Harvard Ph.D., previously an academic in its department of economics and a former member of the Federal Reserve’s Open Market Committee, and now a Visiting Scholar at American Enterprise Institute – and thus clearly a member of America’s governing class. He’s also the author of the highly revealing and readable book Conspiracies of the Ruling Class: How to Break Their Grip Forever (Simon & Schuster, 2016).

According to Diana Furchtgott-Roth’s review of Lindsey’s book, the “core principle” of this class is: “normal people cannot manage their own lives; only the government can do it for them” (see “Donald Trump Leads the Uprising Against the ‘Ruling Class,’” MarketWatch, 17 March 2016).

Angelo Codevilla, an academic at Boston University, also agreed. In “America’s Ruling Class – and the Perils of Revolution” (The American Spectator, July-August 2010) he reckoned that, by the beginning of the Obama presidency, the “New Class” of the late-20^th century had become the “New Ruling Class” of the early-21^st. It’s a “priestly class” that derives its sense of superiority not from ancestry, inherited wealth or demonstrated success in any practical field of endeavour, but from degrees bestowed by élite universities, “woke” attitudes and above all the usually unspoken but always unquestioned assumption that its members are more righteous than their alleged moral inferiors.

This New Ruling Class constitutes the “ins” – and the “Country Party” (e.g., the middle class, particularly self-employed and small business people, constitutionalists, traditional (Burkean) conservatives, Christians and Jews, etc.) comprises the “outs.”

At the end of last year, Rasmussen surveyed America’s elite (which it defined as having at least one postgraduate degree from a top-ranked university, $150,000-plus annual income and residence in a “dense urban area”). Some of the survey’s results are startling. For example, according to Stephen Moore (“The REAL Story of the Two Americas,” Rasmussen Reports, 23 January), “nearly three-quarters of the elites surveyed believe they are now better off financially than they were when Joe Biden entered the White House. Less than 20% of ordinary Americans feel the same way.”

The survey’s other major results are nothing short of jaw-dropping:

• “Elites are three times more likely than all Americans to say there is too much individual freedom in the country. Astonishingly, almost half of the elites and almost 60% of Ivy League graduates) say there is too much freedom.
• “An astonishing 72% of the elites – including 81% ... who graduated from the top universities – favor banning (petrol-powered) cars. And majorities of elites would ban gas stoves, nonessential (defined, of course, by elites!) air travel, SUVs and private air conditioning.
• “Most elites think that teachers’ unions and school administrators should control the agenda of schools. Most mainstream Americans think that parents should make these decisions.
• “Oh, and about three-quarters of these cultural elites are Biden supporters.”

Moore comments: “the Grand Canyon-sized divide between the elites in America and ordinary Americans is so profound that it is as if they live in two different countries. Silicon Valley, Manhattan and Washington have become bubbles that have lost contact with everyday Americans” (see also America’s permanent recession: Is it coming to Australia? 19 April 2022)

“This,” says Moore, “explains why the political class – which is a big part of the elite group – is confused by poll numbers showing that voters are feeling financially stressed out. The elites are doing fine, so they believe that everyone is prospering.”

“The snobs thumb their collective noses at the unrefined working-class Americans. The elites believe they are intellectually, culturally and morally superior to the working class and rural America ... Crime, illegal immigration, inflation, fentanyl and factory closings aren't keeping the elite up at night because in their cocoons, they don't encounter these problems on a daily basis the way so many Americans do today. Not too many main street Americans are losing sleep about climate change or LGBTQ issues.”

Donald Trump’s enemies routinely claim that he’s divided America, but the reality is otherwise: the dissatisfaction of elites’ arrogance and failure that swept him into power at the 2016 election long preceded him. It’s worsened since he left office, and seems likely to return him to the White House.

Daniel Henninger (“America at Obama’s End,” The Wall Street Journal, 2 December 2015) wrote of Trump’s predecessor: “we are near the end of the seventh year of Barack Obama’s presidency, and by any measure the U.S. is a fractured nation. Its people are more divided politically than at any time in recent memory. Personally, many are anxious, angry or just down. Whatever Obama promised in that famous first inaugural address, any sense of a nation united and raised up, is gone. This isn’t normal second term blues. It’s a sense of bust.”

“The formal measure of all this,” Henninger continued, “appeared last week with the release of the Pew Research poll, whose headline message is that trust in government is kaput. Forget the old joke about the government coming to ‘help.’ There’s a darker version now: ‘We’re from the government and we’re here to screw you.’” (Today’s hard-left version is: “I’m a Democrat and I’m here to save democracy.”)

How did America reach this impasse? From wars in Southeast Asia to Watergate, the Iran-Contra scandal, allegations of WMDs and another war in Iraq, and COVID-19, its political class has egregiously lied to the public – and, time after time, championed stupid and destructive polices. As a result, in non-economic matters Americans have increasingly and rightly questioned their rulers. Amazingly, however, in economic matters the ruled have gullibly accepted their rulers’ claptrap. Overlords have assured their underlings: “we know what you need, you can have it all – and we’ll give it to you.”

In other words, allegedly wise rulers haven’t admitted to their supposedly benighted subjects: “you can have X – but only at the cost of foregoing Y.” When you eat your seed corn, in other words, the price of feast today is famine tomorrow. Insiders enjoy the feast; outsiders suffer the famine.

The truth is that no country, including the U.S., can simultaneously have both a fiscally-responsible government and healthy economy (which benefit everybody) and a global military empire (which enriches a select few but harms many more). Similarly, liberty and an ever-growing nanny state cannot co-exist.

Neither Americans nor anybody else can simultaneously have a steadily improving standard of living and a reckless central bank which, in cahoots with the government, prints the money that finances the expansion of the government’s tentacles into every nook and cranny.

A high level of productivity-enhancing investment, which underpins rising living standards, cannot exist without a high rate of saving. The U.S. Government cannot indefinitely fight wars (including “wars” on drugs, poverty, etc.) and cut taxes. Lower taxes benefit everybody, but politicians cannot slash them without also pruning expenditure even harder (which harms vested interests); otherwise deficits rise and become entrenched – which benefits a few but hurts most others.

Donald Trump, should he win in November, won’t, notwithstanding his vow to “drain the swamp” and “make America great again,” even try to modify – never mind upend and overturn – American politics as usual. Government expenditure will almost certainly continue to rise, and taxation might decelerate or even fall; but if so then huge deficits will persist and debt will continue its relentless increase.

The continuation of massive government spending, chronic deficits and rising debt risk higher consumer price inflation and rates of interest that are higher for longer (see Why inflation is and will remain high, 15 August 2022, The Risk of Higher Rates the RBA Is Overlooking, 20 March 2023 and Farewell low “inflation” and interest rates? 20 February 2023). Economic growth and per capita income will also continue to stagnate.

For these and other reasons, whether Trump or Biden wins in November the country’s rulers will continue to punish a large and perhaps even bigger majority of Americans.

Click LIKE so that Livewire knows that you want more of this type of content. Click FOLLOW on my profile for notification when my next wire appears.