This is the Richest Country in the World

The title of this piece is a fact.  By itself the statement is not controversial, but it shows the deliberate misinformation we’re surrounded by every day.

There is a good example from Trump’s speech exiting the Paris Accords: “cash-strapped cities cannot hire enough police officers or fix vile infrastructure.”  The statement is perfectly true, and there is a reason why that statement is true for the richest country in the world.   It is that Trump himself and people like him have taken more and more of that wealth for themselves–and out of the public sector.

For the past six years the Republican Congress has blocked essentially all new expenditures for the public good.  And Trump’s proposed budget will make that a full-scale assault on states and cities.   He is both reducing current aid and also pushing more and more responsibilities for services their way.  The story also includes the Republican-led scandal of education, where reduced state government support for education since the 2008 crisis has contributed to a whole generation trapped with student debt.  (In Trump’s budget the coming DeVos nightmare is its own story–since there is no guarantee what will be paid for by voucher, good education will be sold to the bidder in the brave new world.)

This is the richest country in the world, but the fact that many people don’t feel it doesn’t mean there is no money.   The money has been taken out of the system for the benefit of people like Trump, and they are now proposing to take more of it.

Trump says he is preparing an economic nirvana, where all those who are currently left out will be saved.  More on that pipe dream in a minute, but focus on the explicit reality first:  upper-income tax payers like Trump will make trillions of dollars on it.   There is even a brand new big “pass-through” loophole for rich tax payers like Trump personally. There will be scant benefit for the middle class, and even that may be eaten up by the added costs imposed on the states.  The poor will be slammed on all fronts.

As to the nirvana:

  1. The economy is close to full employment in the sense that good new jobs require specific skills, so most of the current unemployment is structural—due to skill mismatch, not the level of economic activity.  Job training programs are actually cut in Trump’s budget.
  2. Few economists believe that anything close to Trump’s proclaimed 3-4 % growth is going to happen, or even that such growth would prevent a deficit. The deficit itself is inflationary, and would ultimately cause job loss rather than growth.
  3. Stimulus deficit spending at this stage in the business cycle is so foolhardy, that no previous President–Republican or Democrat–has ever wanted to do it. At the very least it invites inflation and the possibility of another 2008-like crash.

This is not Trump’s “genius” at work, it is something far simpler.   Trump believes what he is says, because he is still Trump the salesman looking out for himself:  taxes are bad, regulations are bad, unions are bad, minimum wage is bad, research is a waste.  As a salesman Trump has always had a particular gift for believing what he sells.   And what he is selling is simple:

“What’s good for me is what’s good for the country.   Stop bothering my companies and cut my taxes and everything will be just great. “

There is nothing else here but that.

As the saying goes: if you want to know what is going on–follow the money.  And it is clear where it is going in the richest country in the world.

One thought on “This is the Richest Country in the World

  1. I agree with the argument you make in this post, but the title (and the title of the Fortune article) is somewhat misleading. Total wealth increases mechanically with population size so wealth or income per capita would be a better measure. https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita gives a ranking by GDP per capita from the International Monetary Fund from 2016. The US is near the top excluding natural resource producing countries, so your argument still goes through.

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