Extreme policies by Trump and Musk may not work for a weakened US

The most controversial election in US history has finally ended with Trump re-elected, temporarily defusing the risk of a civil war in the US.  

Trump, in a desperate situation, was determined to win. The Department of Justice under Biden had already convicted him of 34 criminal charges, with even more potential charges waiting. If Democratic candidate Kamala Harris had won, it was likely that Trump would have spent the rest of his life in prison. But he certainly would not have gone down without a fight. His supporters might have launched a riot on an even larger scale than in 2020, perhaps even leading to a civil war that would embroil the US in lasting turmoil.  

However, Trump’s re-election only postpones the crisis in the US. Many Democrats see Trump as a proven criminal, a complete fraud, and a tax evader. Some even hold him accountable for the coronavirus pandemic, which emerged during his first term, resulting in the deaths of over a million Americans and millions more worldwide. Others feel that allowing someone with such a disgraceful record to be president again has deeply embarrassed Americans.

Worse, Trump and his Republican supporters blame all of America’s problems on illegal immigrants, inciting hostility among lower socioeconomic classes against foreign-born people. But the real problem with US society is severe wealth polarisation. In 2021, the top 10% of Americans held nearly 70% of the US’s wealth, while 70% of Americans are financially stressed. These problems are caused by the Trump and other Republican administrations repeatedly cutting taxes for the wealthy.

In the 1950s and 1960s, the rise of socialist countries such as the Soviet Union meant that socialist ideology became increasingly popular in the US, especially among the working class. The American elite, sensing this change and fearing a threat to their own positions, was forced to make concessions to the working class. They decided to impose heavy taxes on the wealthy, allowing much of the working class to achieve a middle-class lifestyle free from basic worries.

This socialist ideological pressure was short-lived, however. In the late 1970s, China opened up and enacted political and economic reforms, abandoning the planned economy model aimed at common prosperity. In 1991, the Soviet Union collapsed and implemented a “shock therapy” approach to capitalism. With the ideological pressure from socialist states eliminated, the American elite concluded that the socialist chapter in history had closed. Capitalism had triumphed over socialism, and it was no longer necessary to make concessions to the working class.  

They kept reducing taxes on the wealthy — from 92% in the 1950s to the current 15% — leading to situations where one of the richest men in the US, Warren Buffett, ended up paying less taxes than his secretary. Even Buffett himself does not approve of the tax disparity — he has written to the president multiple times, advocating for an increase in taxes on the wealthy.

During Trump’s previous term as president, he further reduced taxes on the wealthy from 15% to 10%. Meanwhile, working-class Americans — whose income predominantly comes from wages — are taxed at a rate of 39%, while the wealthy pay only 10% tax on their income from the stock market.

The US government has long provided substantial tax cuts for the wealthy and allowed them to set up family and dynasty trusts, significantly reducing government revenue. At the same time, the US government has long permitted American companies to shift production overseas, leading to massive job losses for industrial workers. States like New York, Pennsylvania, Ohio and Michigan have cities that were part of what is known as the Rust Belt. The Rust Belt describes areas that experienced industrial decline from the 1950s  — workers were forced to relocate due to the outsourcing of industries, causing population outflows that led to a collapse in real estate prices. 

This situation severely affected the financial status of local governments, making it difficult to meet expenses and pay wages and pensions. Some cities, such as Detroit, had even declared bankruptcy. Many small cities in the midwestern US experienced significant population outflows, with real estate prices remaining stagnant for decades. When real estate prices stagnate, there will naturally be a lack of investment in real estate. Some Americans have even said that apart from the East and West coasts, there is nothing in between. Although somewhat extreme, this statement reflects the current situation in the US to some extent. 

When I first arrived in the US, I was shocked by the poverty and helplessness of the lower class. More than 30 years have passed since, and the situation for the lower class has not improved. The US government spends more than 1 trillion annually on welfare programmes, surpassing its defence expenditure. A few years ago, some people in China were surprised that the Chinese government spent more on maintaining stability than on its military. However, compared to the US, China’s spending is relatively minor.

The US government’s annual revenue is just over 4 trillion dollars, while its expenditures exceed 6 trillion, resulting in a fiscal deficit of more than a third. Aside from the massive military spending, a significant portion is spent on aid for the poor. This is how the US debt, which exceeds US$36 trillion, was accumulated.

Trump and his ally Musk are very shrewd businessmen who understand that the underlying issue in the US is the budget deficit. Hence, they have made numerous promises to cut spending and proposed the setting up of a Department of Government Efficiency, with Musk suggesting he would personally serve as its head. He even threatened to cut bureaucracy in the federal government by a third, and “delete“ the Internal Revenue Service (IRS). All of this is easier said than done, and reflects a lack of understanding of the inner workings of the US government. 

The workings of the US government are essentially a power struggle among various political factions. The Republican Party is committed to increasing military spending and cutting taxes for the wealthy, while the Democratic Party seeks to reduce military spending, increase taxes on the wealthy, and boost welfare for the poor. Additionally, there are thousands of interest groups, each with its own demands. 

The promises made by Trump and Musk to win elections are mostly difficult to fulfill. A serious attempt by them to realise these promises could wreck the US, and even potentially threaten their own wealth and safety. The remedies proposed by Trump and Musk are drastic, and an already weakened US might not be able to withstand such drastic measures.

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