Yes, it’s a crazy title, but I promise it will make sense by the end of the post.
Please start by watching this video by RealLifeLore on YouTube: https://www.youtube.com/watch?v=hfjTUvzaZ7s
A major goal of the Biden administration is the CHIPS ACT, which he claims will “bring jobs back to America” and make us less dependent on other countries, namely our ally Taiwan.
The first problem with this argument is that unemployment is not a big problem. Unemployment is around 3%, historically the floor for unemployment in the United States. Our economy is very strong; we don’t need to pump money into “creating jobs” when unemployment is so low. The US government should be countercyclical at all times, and since we are in a period of declining inflation, economic growth, and low unemployment, we should not pump more money into the economy beyond the standard baseline of maintaining existing infrastructure and scientific research. Now is the time to pay off our debt. Corporate subsidies in a time with high economic growth and low unemployment will only push up inflation and worsen inequality. We need to be paying off our debt right now.
I do not believe the CHIPS ACT is about economics. I believe Biden’s economic performance is because he has surrounded himself with highly competent individuals, especially Janet Yellen.
Janet Yellen is a New Keynesian economist who backed the Inflation Reduction Act, which hopefully will set a baseline for infrastructure upkeep going into the future. But I don’t believe she supports the CHIPS ACT because, from a New Keynesian point of view, it really doesn’t make any sense beyond the investment baseload it jump-starts.
What the CHIPS ACT is really about is reducing American dependency on Taiwan so that when China invades Taiwan, the United States can sanction China without harming our ability to create computers without getting militarily involved. The CHIPS ACT is primarily a foreign policy law.
The foreign policy of the Biden administration can be summarized as so:
- Losing the War in Afghanistan, claiming he wants to focus at home and not fight the wars of other countries. Biden is only the second President in history to lose a war.
- After eight years of being a frozen conflict, Russia invaded Ukraine further. The United States failed to provide Ukraine with enough support to fully repel the much larger Russian army immediately, leading to a stalemate further into Ukrainian territory compared to the aftermath of 2014.
- China relishes America reducing trade with Taiwan through the CHIPS ACT because it will reduce the probability the United States will defend Taiwan.
- Azerbaijan has ethnically cleansed Nagorno-Karabakh.
- Over half of the deaths in the Israeli-Palestinian conflict have occurred since October, despite the war being ongoing since 1948. Israel is striking Lebanon. It is quickly turning into a regional conflict. There is very limited evidence the Biden administration will do anything except send Israel more weapons, which are blowing up entire city blocks.
Biden is a failure when it comes to foreign relations. The world has become more dangerous since he entered office. It’s mostly a continuation of Trump-era policies in terms of foreign relations, without the crass speeches.
I cannot find any plans to expand free trade agreements with other countries. We haven’t signed a new free trade agreement since 2007. We are in the process of negotiating a free trade agreement with the United Kingdom.
The main issue with the TTIP, the proposed US-EU trade agreement, is it would have mostly been trying to extend the onerous US. patent and copyright rules to the European Union without significantly improving trade for individuals. This is certainly the reason why the text was never properly released so the public could analyze the text fully.
Significant differences exist between the international trade policies of the United States, China, and the European Union. When the European Union extends free trade, it generally benefits all people in the countries involved. When the United States signs a free trade agreement, it benefits massive corporations. When China signs an agreement, it is generally the leasing of land in exchange for significant debt for the country on which they are building infrastructure.
The European Union free trade model is the best, not just because it is far more effective at being implemented but also because it is better for everyone.
This explains why the United States has free trade agreements with all countries on the Pacific coast of the Americas except Ecuador, plus the Dominican Republic, Morocco, Jordan, Israel, Oman, Bahrain, South Korea, Singapore, and China.
China has free trade agreements with ASEAN, Australia, New Zealand, Pakistan, South Korea, Georgia, Singapore, Costa Rica, Peru, and Chile.
The European Union has signed treaties with Vietnam, Japan, Singapore, Kosovo, Georgia, Moldova, Ukraine, South Korea, Bosnia and Herzegovina, and Serbia since 2007. It already had agreements with the United Kingdom, Montenegro, Albania, Algeria, Chile, Lebanon, Egypt, North Macedonia, South Africa, Jordan, Mexico, Palestine, Faroe Islands, Morocco, Israel, Tunisia, Turkey, Iceland, Liechtenstein, Norway, San Marino, Andorra, Switzerland, and Monaco. They are in the process of negotiating new free trade agreements with Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, Dominican Republic, Grenada, Guyana, Jamaica, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago, Haiti, Comoros, Madagascar, Mauritius, Seychelles, Zambia, Zimbabwe, Costa Rica, Guatemala, Honduras, Nicaragua, Panama, El Salvador, Cote d’Ivoire, Colombia, Peru, Cameroon, Fiji, Papua New Guinea, Samoa, Solomon Islands, Botswana, Lesotho, Mozambique, Namibia, South Africa, Eswatini, Ghana, Ecuador, Canada, New Zealand, Benin, Burkina Faso, Cabo Verde, Cote d’Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone, Togo, Burundi, Kenya, Rwanda, Tanzania, Uganda, Chile, China, Argentina, Brazil, Paraguay, Uruguay, Mexico, Australia, Andorra, Indonesia, Monaco, Philippines, Timor-Leste, Tonga, San Marino, and India.
The European Union’s strategy is more successful. They have more agreements today and pending free trade agreements than all of the free trade agreements of the United States and China COMBINED.
America has a lot to learn about how to build relationships successfully worldwide. If current trends continue, the 21st century is the century of the European Union.
While America dominated in the latter half of the 20th century due to large investments in education made in California, leading to Silicon Valley, we have mostly been coasting on this success for the last 30 years. We are investing more, which is a major strength of the United States, plus the fact that we have a common language. However, in the 2020s century, given how the United States looks weak militarily given the failures in Ukraine and Afghanistan, more European Union member states hit their NATO targets, according to SIPRI. If European Union member states increase their military expenditure to 3.2% of their GDP, they will collectively spend as much as the United States. They spent 1.6% collectively and could increase that to the 2% target with minimal changes to taxes or services. The country with the largest gap, Luxembourg, would need to spend approximately $1400 per person to cover its funding gap. But it’s Luxembourg; they can handle it. The second largest gap is Belgium, which has a gap of only $360 per person, which they can cover. There is no reason why European countries need to choose between meeting their NATO targets and maintaining their health and education systems.
The European Union has a GDP on par with the United States, making it an equal partner to us in terms of military capabilities. As time passes, the European Union will likely see its economic integration level out the inequalities across the union as Eastern Europe improves. This could bring them to American GDP per capita in the long term to be an equal partner in terms of per capita performance 40 years before China comes close to our level of prosperity. If The European Union succeeds in expanding free trade agreements, they will hopefully see their growth rate outpace the United States in the long term to make this possibility a reality.
The United States is sitting at a major crossroads. The European Union is getting to a point where it can act as a military force in its own right. Once their military expenditure increases to the point where it equals the United States, the need for NATO will significantly diminish. If their free trade agreements around the world succeed in boosting EU GDP growth over the next few decades, not only will they have strong relationships globally, but they will have more resources to counter Russia without being as dependent on the United States. It is obvious to me that the unwillingness of the United States to send Ukraine enough aid, especially when we send Israel everything they ask for to bomb refugee camps, all of this on top of our failure in Afghanistan and refusal to hold Saudi Arabia accountable for their actions supporting terrorism, makes America look weak on the global stage. The slowness in the movement of aid to Ukraine, which allowed Russia to attack so quickly, only further strengthens those who doubt whether America is a reliable ally. If American membership in NATO seems superfluous, military decisions might be made more through the European Union and less through NATO. If the Biden doctrine continues, the European Union might sign some agreements with Canada bypassing the United States and Turkey if we remain unreliable, making NATO irrelevant. I don’t want this to happen, but unless the United States regains its ability to be a reliable partner, this is the future we are looking at.
When it comes to the CHIPS ACT, this is a movement away from free trade. It is a movement towards a world where might makes right. It changes to a world order where America is less able to defend our allies, and our ability to muster international support for smaller democracies like Taiwan, South Korea, Georgia, and Ukraine will evaporate.
The only option for Europe with this foreign policy of the United States is to make the EU a military organization on par with the United States, significantly reducing the importance of NATO. It will isolate America globally, and if we are attacked, why should anyone defend us? China has twice the personnel of the United States. According to the International Institute for Strategic Studies, the European Union has approximately 2.6 million military personnel, compared to 2 million in the United States. From a manpower standpoint, the European Union should be able to stand independently today. This doesn’t mean we should dissolve NATO, but it does mean that if the US was an unreliable partner, it is possible the European Union could stand on its own.
This is the road we are currently pointing towards, but it is not the world I want.
I want to live in a world where war is less common and authoritarian regimes become democracies. This was the policy of the United States and our allies for most of the 20th century, and it succeeded. Invading democracies unilaterally to create a democracy is not the best way to do this, but when there is a movement to overthrow a dictator from the people, it is right to support the democratic movement. When a government (e.g., the Taliban) is using its power to attack other countries, it is our responsibility to defend and overthrow the dictatorship if possible. It is a tricky line because democracy must start from within, but if a dictatorship is brazenly attacking its democratic neighbors (e.g., Russia), it is wrong to stay neutral. The difficulty of the Iraq war is that, yes, Saddam Hussein was a brutal dictator who committed genocide against the Kurds. He was indefensible. But diverting resources from Afghanistan after we had to take out the Taliban because they were allowing al Qaeda to gain power and be a global threat was the wrong thing to do. Simply invading without nation-building will lead nowhere. In the case of Afghanistan, there was a constant flow of money from the Gulf States into the country to support terrorism, which made it nearly impossible to eliminate the Taliban. We needed to shut down all trade with the countries that sponsor terrorism or allow their citizens to send money to terrorism because it turned the Taliban into a Hydra. I believe that was our major error that made the Afghan war last far longer than needed, ending in a total victory for Wahabbism. Modern warfare is fought through trade just as much as through guns.
On top of that, we also need to make it as hard as possible for our allies to backslide after democratization. Europe and South America have the right idea: reducing travel and trade barriers while building institutions that make trade easier for everyone. This has clearly succeeded. The difficulty is that Ukraine is not at the point where it meets EU acquis but is (ignoring the invasion for a second) an extremely viable candidate for NATO membership. But for every other European democracy, the EU model has proven successful in increasing democratization and stability.
The United States has a vital role to play in this defense of our world. Is anyone so stupid as to believe that if the rest of NATO were to fall, the United States would be able to stand to a full land, sea, and air invasion from authoritarians? Al Qaeda terrorists weren’t even stopped by the State Department in 2001, which led to the 9/11 bombings. Nothing stopped the Boston bombings. Domestic terrorists, primarily white nationalists, are an even larger threat, yet very few resources are going in to counter their beliefs and arrest their leaders. The United States alone versus a unified Russian/Chinese invasion would be a stalemate. They have over twice the number of total troops as we do. All of NATO versus a Russian/Chinese invasion would be a resounding victory for democracy. The same goes for the European Union. The EU could have a stalemate by itself against an invasion, too, but unified with the United States would be a resounding victory. Especially if South Korea, Taiwan, and India came to our defense. We would defeat them not just in terms of pure manpower but also superior technology. A NATO-South Korean-Indian-Taiwanese alliance would be unstoppable. NATO goes both ways, and America is safer because of it.
If the United States values global peace, trade, and freedom, we need to strengthen NATO, defend Ukraine, shut down sponsors of terrorism, and expand NATO to include other global allies, including South Korea, India, Brazil, and Taiwan. We must also include more small democracies such as Costa Rica, Uruguay, Chile, Georgia, Armenia, etc. The two major authoritarian states today, Russia and China, would be completely unable to counteract such an alliance. There are only five states today with more than 10 million people, a GDP per capita over $5,000, and a democracy score under 4. These are Russia, China, Kazakhstan, Iran, and Saudi Arabia.
In contrast, there are 19 countries with a population of over 10 million, a GDP per capita of over $5000, and a democracy score of over 7. We have slightly fewer people than those five authoritarian regimes, but we crush them when it comes to GDP.
Could the United States stand on its own? Yes, but it is unfair to smaller democracies who want to survive. Not only that, but it is against the interest of the United States. We also are far stronger when we have large alliances and trade networks spanning the world, which moves us from being a poor target for authoritarians to being a suicidal target. We are less safe when authoritarian regimes can wipe out smaller democracies, whittling down our list of allies. This is a menace that needs to be stopped early.
Americans are safer when there are more democracies and when we maintain good, close relations with all democracies that respect the rights of all people within their borders.