Editor’s Note: The Bear’s Lair is happily continuing for the foreseeable future as we were never dependent on USAID funding. Our sincerest condolences to our suddenly impoverished fellow writers.
President Trump has had a very successful first few weeks in office, issuing a blizzard of Executive Orders that not only reversed much of the damage of the Biden administration, but also made some changes that had been needed for decades. Inevitably, there were also a few mis-steps. However, both Trump’s temperament and belief system could lead to damaging errors in the future, and the delicate and infuriating process of passing legislation through Congress may worsen matters further. There are thus many things that could go wrong and turn what should be a stellar Trump second term into a disappointment, or even a fiasco.
The most important task of the Trump administration, though Trump himself probably does not realize this, is to get Federal spending under control. Currently, the Federal government is taking in roughly $5 trillion in taxes and spending roughly $7 trillion, a Federal deficit of about 7% of GDP at the top of an economic cycle, which is why the Federal debt is spiraling out of control. Several past administrations are responsible for this dangerous situation, though the most blame should be put on the George W. Bush administration, which took a budget showing a healthy surplus and turned it into a $400 billion annual deficit, even before the 2008 financial crisis hit. That administration was nominally Republican; it was a disgraceful failure in budgetary as in other areas.
The later administrations of President Obama and the spendthrift President Biden made the problem worse but you would have expected them to; they were left-wing Democrats, from whom you cannot expect fiscal responsibility any more than you can expect a bunch of ten-year-olds not to scoff a box of chocolate creams (the moderate, highly responsible Democrat administration of President Bill Clinton was a different matter). As for Trump’s first administration, he could not even get the Quisling Speaker Paul Ryan to spend a mere $5 billion on his border wall; it is thus behaviorally not surprising that the onset of COVID-19 would have made him ignore the warnings of his party colleagues and spend money like water.
The most promising signal on this front is the closure, at least temporary, of USAID. USAID nominally spends only around $50 billion per annum but eliminating even that sum from the deficit would add to about $600 billion including inflation over a 10-year period, the way these things are usually calculated. It is vital, however that USAID be actually abolished; “reform” will not do – any programs that are accidentally worthwhile can be operated by the State Department directly. Keeping the agency in being would allow Democrats and lifer bureaucrats to un-reform it when backs are turned. Only abolition and sowing its fields with salt will do the job. While he’s at it, Trump could abolish the charitable income tax deduction and thereby defund all the leftist NGOs that have been funded by USAID and do so much damage to U.S. interests.
Ever since it was set up by a JFK Executive Order (so it can be abolished similarly) USAID has been a nest of anti-Americanism, in recent years promoting the most extreme versions of “woke” culture to countries for whom such a culture is utterly distasteful. One can imagine a similar agency in the late Roman Empire, the Aid Agency of Heliogabalus, promoting that Emperor’s follies to simple Gothic tribespeople for whom cannibalism was a normal part of daily life but suffocating dinner guests with rose petals was a depraved excess that made the whole of Roman culture suspect, literacy, aqueducts and all.
There are other similar indications of good times ahead. Abolishing the Department of Education would save more than abolishing USAID – about $80 billion annually – and would have the advantage that school syllabuses could be de-standardized, reversing the loathsome dumbing-down “Common Core” reforms of America’s worst Republican President George W. Bush – and allowing the more sensible states to build education systems that actually educated. Of course, Democrat-run states would continue to push illiterate wokery that condemns their young citizens to a life on drug-fueled welfare, but they will do that anyway; at least with the DOE gone half the country will have the chance to become the next Elon Musk, rather than importing him from South Africa.
The DOGE effort to abolish government agencies, or to defund them, is a thoroughly useful initiative. It is very likely the Democrats will line up sleazy lawyers and judges to get it stopped, but they should be resisted with all the force the government can muster. The Founding Fathers designed the U.S. constitutional system to move slowly; Trump has only four years, he should concentrate his efforts in this direction. Huge amounts can be saved by making the Defense Department work efficiently, for example, especially if Trump reduces the United States’ worldwide commitments, the program on which he ran.
Regrettably, several of Trump’s other ideas range from damaging to disastrous. The Sovereign Wealth Fund will be a boondoggle that future Democrats will use to steal resources from taxpayers. Since the U.S. already runs a gigantic budget deficit, funding a Sovereign Wealth Fund from borrowed money is economically insane. In addition, experience has shown all over the world that government is a very bad investor; while some sovereign wealth funds such as Norway and Singapore have performed reasonably, those countries are very much better run than the United States, with honest politicians and few calls on their resources. Government desperately needs to be shrunk (it would need to be shrunk by nine tenths for Trump’s idea of funding it with tariffs alone to be viable). The Sovereign Wealth Fund grows government; if it is tiny, and prevented from expanding at taxpayer expense, it will do only modest damage, although even then the principle is too dangerous to be admitted. The government will not have Elon Musk working for it forever; why should one imagine that any other government official, including Trump himself, could make a success of running TikTok?
Bad though the Sovereign Wealth Fund is, it pales into benignity beside the truly unspeakably bad idea of the U.S. occupying Gaza, into which the ineffable Benjamin Netanyahu appears to have talked Trump. The U.S. is an ally of Israel; it should stop being the country’s sugar-daddy, it cannot afford it. Arms sales to Israel should be made on a willing buyer-willing seller basis, with Israel paying full price for what it buys – it is a wealthy country, which we should not subsidize. The United States has already spent 25 years and appalling amounts of money messing about in the Middle East, all of which effort has made the region even more of a hellhole than it already was.
There can be no possible reason, other than an altogether objectionable level of subservience to Israel, for the U.S. to take on a commitment to manage a barren strip of land of no possible strategic or economic value, currently full of terrorists and even if they are moved full of unexploded landmines and the like. Trump’s voters want to reduce sharply U.S. commitments overseas, particularly in the Middle East, a culturally alien region where the U.S. has no strategic interest. If Trump does not reverse this idiotic idea he will be repudiated by his voters, throw away his valuable political capital, prevent himself from achieving anything else and go down in history as an utter ignominious incompetent.
Taking over Greenland, on the other hand, is a genius idea, if Trump can pull it off. Very few people, abundant natural resources, strategic position in the Arctic – what’s not to like? Likewise, voter ID in elections is an essential component of a democracy that works and is supported by 77% of the public, according to one recent poll. Elections like that of 2020 in which the majority of people cannot have confidence are very bad for the system. Universal voter ID, ideally combined with same-day vote counting and tight limits on mail-in ballots, is the best way to solve that problem.
Trump is a little like Henry VIII – it’s impossible to argue with him, and which direction he goes on any day depends on who has talked to him most recently. Hopefully he will not follow Henry VIII and become ever more tyrannical and foolish in his old age. The United States desperately needs a Thomas Cromwell, to make sure that he doesn’t follow Henry VIII’s decline, and ensure that he will be remembered as one of our best Presidents. Mount Rushmore awaits!
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(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)