The American ruling elites face complex dilemmas. Domestically, President Trump and his advisors disregard the country's constitution, and internationally, they have abandoned international law. However, they enjoy the support of a large segment of the American political class and the fabulously wealthy elites who control it, through their massive campaign financing and corrupt influence in the legislative system. With all their power and wealth, it is clear that the American ruling elites and political class prioritize their own narrow interests and will never respond sensibly to the needs and aspirations of their people, the foremost of which is peace.
Domestically, American society is suffering from a crisis of economic growth, an unpayable external debt, a dramatic decline in the population's purchasing power, and the chronic deterioration of its infrastructure, especially its electricity grid. The undeniable advance of climate change presents a series of formidable environmental challenges that its free-market system only exacerbates. Furthermore, it is now experiencing the violent shock of the Trump administration's racist and repressive policies against immigrant families, which are destabilizing not only social stability but also the entire economy.
Abroad, with or without Donald Trump's ineptitude, the US government lacks credibility as a reliable counterpart. In the major world powers, US interests are progressively losing ground to the influence of the People's Republic of China and Russia. Its resounding political and military defeat in Ukraine against Russia opens a range of potentially toxic outcomes that could further poison tensions with its allies in Europe, West Asia, and East Asia. The criminal and counterproductive attack against Venezuela has demonstrated the limitations of US economic and military power, even in its own hemisphere: a determined people can overcome a prolonged and ruthless economic aggression and can deter a ground invasion.
The internal crisis in the United States
In March of last year, the House Budget Committee explained that the nation's rising national debt, at $36 trillion at the time, represented a debt-to-GDP ratio of 122 percent. The Committee observed, “If Congress does not act swiftly to address the structural disconnect between reckless federal spending and incoming revenues, our nation will experience a slow and painful economic demise through either sustained stagnation or a rapid and catastrophic sovereign debt crisis.” For the nation's financial policy, the consequences of such a high and rising national debt include a marked increase in interest payments and upward pressure on interest rates.
In fiscal terms, this implies less fiscal capacity to respond to extreme events such as an economic depression or a pandemic, and a greater risk of recurring fiscal crises that are increasingly difficult to manage. The external debt problem is currently masked to some extent by the enormous stock market bubble. Recently, the value of all U.S. corporate capital was equivalent to 363% of nominal GDP, an all-time high. The previous peak in 2000 was 212%. The current bubble is characterized by the dominance of a very small number of companies that account for more than 40% of the total market capitalization of the S&P 500 index.
Observers note that the stock prices of these companies continue to rise, far outpacing reported profits. Investment in artificial intelligence (AI) equipment and software is equivalent to 4% of GDP and accounts for by far the majority of national GDP growth. Many financial sources have estimated that real GDP for 2025 would have been close to recessionary levels without AI activity. But large AI companies would need to significantly increase their revenues to cover the costs of their investment.
The possibility is growing that the sector will need a government bailout when the bubble bursts, similar to the financial sector bailout in 2008 and 2009. Although officially ruled out, this option is the most likely outcome of the stock market crash that would otherwise occur. Meanwhile, reports indicate that the US manufacturing industry has been in recession for three years, and this stagnation could soon extend to the service sector as well, since the purchasing power of the vast majority of families in the country has fallen sharply.
In much of the country, the cost of electricity has increased by 40% compared to prices five years ago. Even modest housing is unaffordable for most families, leaving them with no alternative but to rent. To allow both parents to work, they must pay a high amount for childcare, but if neither parent works, they cannot cover their family's basic living expenses. 35% of the population, 91 million people, cannot afford health insurance. More than 14% of the population do not have enough income to ensure they have enough to eat.
To address the population's lack of purchasing power, an essential element would be an increase in productivity. Currently, the relatively high productivity of the American economy compared to European economies is primarily due to the professional and business services sector. In the Chinese economy, the industrial sector is much more important. A Chinese worker produces two to three times more physical output than an American worker. China is a world leader in manufacturing production largely because investment in its economy is more than 40% of its GDP, double the amount of domestic investment in the American economy.
Perhaps the best example of the imbalance in American investment is the AI investment bubble compared to the lack of investment in the electric power sector. Electricity demand is now growing at its fastest pace in 80 years. Electric power regulators have warned of increased risks of grid failures and potential widespread blackouts due to the country's lack of preparedness for such events. The Department of Energy warns that blackouts could increase 100-fold by 2030 if reliable power sources continue to be shut down without ensuring significantly more additional capacity than is currently being installed.
The threat of a serious national energy emergency exists as a real possibility due to a long-standing lack of investment. Partly to compensate for this lack of investment in order to maintain competitiveness relative to China, the Trump administration imposed aggressive tariffs last year on almost every country in the world. The goal of the tariffs was to create jobs and reduce the trade deficit, but instead, the new tariffs have increased prices for consumers, further eroding the population's purchasing power. At the same time, they have hindered job creation because they have harmed the American industrial sector, which depends on the import of raw materials and other inputs.
The international crisis
Just as the American people have lost faith in their corrupt political class and government, the majority of the world also knows that it is impossible to trust American leaders or the good faith of their government. The Chinese government rejects the double standards of the United States and its allies regarding the renegade Chinese province of Taiwan. The Iranian government experienced the betrayal of President Trump's administration, which invited them to dialogue only to disguise its agreement with Israel to carry out the terrorist attack of June of last year. Prime Minister Narendra Modi and his government had trusted in American goodwill only to face the imposition of punitive tariffs and attempts to force them to sever ties with Russia.
For its part, the Russian leadership is well aware of the falsity of the Minsk Agreements regarding Ukraine and of the current peace proposals from the US government, which maintains a campaign of terrorist attacks against the Russian civilian population and even carried out an attack against President Vladimir Putin's residence. The absence of any US proposal to reinstate a nuclear arms control regime undermines confidence in US good faith in preventing a nuclear war. In general, like Russia, the majority of the world's countries reject the constant use of terrorism by the US government and its allies to destabilize their governments and condemn their complicity in the Zionist genocide in Palestine.
The international consensus is that the US government is the primary source of insecurity and instability in the world. The tariff war initiated last year by President Trump has led major countries like Brazil, South Africa, and India to more urgently assess their vulnerability to the rogue US government. Now, President Trump's demand for the Danish territory of Greenland has forced even his European vassals to review their transatlantic relationship, which could signal the end of NATO. In any case, NATO has suffered a fatal blow as a result of its resounding political and military defeat in Ukraine. NATO's war against Russia in Ukraine has revealed that its military-technical systems are ineffective and its strategic and tactical capabilities are a failure.
On the other hand, the criminal attack by President Trump's administration against Venezuela failed to change the Bolivarian revolutionary government. The region's most important governments—Brazil, Colombia, and Mexico—are also reassessing their vulnerabilities to the criminal U.S. regime. President Trump presents his purchase of Venezuelan oil as a victory, when only his own sanctions prevented it. However, there is now little willingness among major U.S. companies to provide the enormous investment needed to repair Venezuela's deteriorating oil infrastructure, after more than eleven years of economic attack and in the context of extreme insecurity caused by that same U.S. aggression.
In important ways, the assault on Venezuela has been a completely clumsy failure. It has provoked opposition from important countries both within and outside the region. By threatening the large investments they have made in Venezuela, it risks further conflict with Russia and China. It has been demonstrated that the U.S. armed forces do not want to risk troops on the ground for a prolonged campaign. In response to the threat to their interests in Venezuela, China and Russia will take appropriate measures to retaliate against the Trump administration in other areas of international relations in a way that seriously harms the U.S. economy or, in coordination with Iran, imposes restrictions on the passage of U.S. oil shipments through the Strait of Hormuz.
Conclusion
There is a strong correlation between the American domestic crisis and the despair surrounding its failed foreign policy. President Donald Trump's approval rating among the American electorate has fallen to around 42%, based on a representative average of polls, compared to a 55% disapproval rating, and is trending downward. Much American political commentary raises the possibility of a constitutional crisis in relation to the midterm elections this November. President Donald Trump has stated that, due to the resistance to his highly repressive policies against immigrant families across the country, he could invoke the Insurrection Act and cancel the elections.
It is impossible to know for sure what the outcome of the current American socioeconomic and political crisis will be. Nor is it possible to know for sure what the outcome will be of the ongoing failure of its zombie foreign policy of aggressive extortion. The world's major nuclear powers, China and Russia, are acting with great caution. Although they would almost certainly win a conventional war against the weakened American armed forces, they want to avoid the nuclear war that would be the virtually inevitable consequence of their victory. The rogue American elites have abandoned all international norms. They are pushing the strategic patience of the Chinese and Russian leadership to its limits, and it remains to be seen how long that patience will run out.
