[By Robert McNally, translated by Chen Jiarui]

On the occasion of the 250th anniversary of the armed resistance against British rule in the colonies, it is particularly timely to review the long cycles of American political history and understand their impact on the current situation and future prospects.

About every 80 years, the United States undergoes a decisive major crisis, reshaping itself: the War of Independence, the Civil War, and World War II.

These three major crises resolved the core disputes of the nation by forcing opposing ideological factions to choose between two options: revolutionaries versus loyalists, abolitionists versus federalists versus secessionists, internationalists versus isolationists.

In the decades leading up to each major crisis, Americans attempted to reconcile irreconcilable ideas, delaying resolution. However, as Abraham Lincoln once said, the country was forced to become "either this or that."

A key but often overlooked point is that before these decisive crises, both sides were often minorities, even considered fringe groups.

The War of Independence resolved a core dispute: how to balance the political and economic rights of colonial peoples with loyalty to the British king and parliament. Before the first shots were fired at Lexington and Concord, neither the revolutionaries demanding complete independence nor those prioritizing loyalty to the crown had broad popular support. Historians estimate that supporters of the revolution accounted for about 30% to 40% of the total population. Approximately 20% were loyalists, with the remainder remaining neutral.

With French assistance, the revolutionaries defeated the British army and loyalists, resolving the nation's core dispute and securing independence in version 1.0 of America.

Next came slavery as the new core controversy, an "irreconcilable conflict" that decades of middle-ground compromises could not resolve. Before the Fort Sumter incident, abolitionism and secessionism were radical proposals. The Civil War gave birth to version 2.0 of America, elevating previously marginalized abolitionists to the norm while relegating the defeated Confederate South, like former loyalists, to the ranks of historical losers in American history.

Fort Sumter incident was the spark that ignited the American Civil War

The next core division facing America concerns its role on the global stage: adhering to George Washington's advice to avoid "foreign entanglements," or projecting its growing economic and military strength worldwide.

National debates over sovereignty and slavery were deeply influenced by regional conflicts. In contrast, the formation of America's global role was gradually shaped by responses to external worlds.

America has tried colonialism and interventionist policies, but after World War I, it turned away from global disputes and embraced isolationism. Prior to December 7, 1941, those advocating raising and deploying millions of troops to fight the Axis powers and make America the world's police force, creditor, and economic pillar were politically marginalized. However, the surprise attack on Pearl Harbor on that day united the nation and gave rise to version 3.0 of America — a rising global superpower.

Eighty years after World War II, America is on the verge of another core controversy: the size of government. For decades, Americans have lived in a welfare state, enjoying ever-growing, generous, and subsidized social welfare along with low taxes. But now, bond markets will no longer allow us to have our cake and eat it too.

Since 1930, federal spending has grown from 9% of GDP to 23% in 2024. Now, most federal spending is allocated to subsidizing medical and Social Security benefits, primarily for retirees. These expenditures far exceed all federal spending, though rapidly rising debt interest is catching up.

Candidates promising generous and subsidized social welfare without tax increases often win voter favor. Thus, faced with increasingly expensive retirement expenses, Congress has not raised wage taxes to address extended lifespans but instead accumulated massive debts to be passed on to future generations.

The widely cited $36 trillion public-held debt severely underestimates the fiscal crisis. Over the next thirty years, Social Security and Medicare will cumulatively face $124 trillion in deficits. These debts are not hypothetical; they are a reality that structurally and automatically increases the scale of outstanding debt.

For decades, the U.S. has been able to borrow easily, partly due to the dollar being the global reserve currency. However, market commentary and actions by major fixed-income players indicate that easy borrowing days for the U.S. government are coming to an end. Warning signs include: even after the Federal Reserve cut short-term rates last September, Treasury yields continued to rise; investors also reduced their allocation to U.S. debt.

Nevertheless, Congress refuses to take measures to avoid a fiscal crisis through tighter fiscal policy. Instead, the U.S. government is accelerating the debt crisis. On January 5, Biden signed a bill increasing Social Security benefits, which will push the program into bankruptcy six months earlier than planned.

California Social Security office, increased pressure on Social Security finances after Biden signed the bill

An inevitable and regrettable outcome of low-tax policies is that the U.S. cannot coordinate between social welfare and taxation. The resulting debt problem will inevitably be resolved in a crisis rather than through compromise.

This crisis is likely to begin in the bond market. As fiscal deficits continue to expand, creditors will demand higher Treasury yields to compensate for rising inflation risks or the direct possibility of default. Higher interest rates will trigger a debt spiral, increasing government repayment costs and expanding fiscal budget deficits. As U.S. Treasury yields rise, mortgage rates and capital costs will also increase, undermining financial stability and threatening economic recession.

As a financial crisis hits the real economy, politics will also be affected, forcing the new U.S. administration to make difficult choices that it has avoided for decades. Although theoretically, a balanced compromise solution including tax increases and welfare cuts is possible, the cumulative debt is now so large and public opinion too fragmented and polarized to reach such a compromise.

Like previous major crises, the solution is likely to come from hardline fringe elements. All parties will blame each other for the different causes of the fiscal crisis and propose radically opposite solutions.

Left-wing fringe forces will attribute the crisis to insufficient taxation, calling for significant tax hikes and asset seizures to expand and consolidate federal welfare programs.

The right-wing fringe, fiscal conservatives, will blame mismanagement and incompetence in Congress, advocating shifting retirement income and healthcare from government control to individual and market dominance, thus significantly reducing or completely eliminating the federal role in providing retirement benefits.

No matter which side wins, it will establish its主张 as the new normal and dominate the direction of national development for generations to come.

If the left wins, the once-dismissed "Green New Deal" will become the foundation of American policy, influencing far beyond the climate sector. The U.S. government will implement large-scale income redistribution, labor reforms, and social projects, packaging them as emergency wartime mobilization akin to the New Deal and World War II eras.

If the right wins, version 4.0 of America will transform into a more streamlined, market-oriented republic, with power and responsibility for retirement income and healthcare shifting from Washington to states and individuals.

Debt, demographics, and mathematics can never be ignored. Americans must choose between funding the welfare state through "central planning economics" and a limited federal capitalist economy. We must "choose one."

This article is an exclusive contribution from Guancha.cn. The content purely reflects the author's views and does not represent the platform's stance. Unauthorized reproduction is prohibited; violation will result in legal liability. Follow Guancha.cn on WeChat (guanchacn) for daily interesting articles.

Original source: https://www.toutiao.com/article/7498625169666179603/

Disclaimer: The article solely represents the author's views. Feel free to express your opinions by clicking the 'thumbs up' or 'thumbs down' buttons below.