America's 25 Years of Decline

“The first quarter of the 21st century, which ends this week, has been a period of misgovernment and national decline for the U.S.

 

At the conclusion of the 20th century, America's leadership was uncontested. We had the world's strongest economy and most powerful military, bolstered by an unequaled system of alliances. Americans from the bottom to the top enjoyed rising real incomes. The federal budget ran a surplus for four consecutive years, from 1998 to 2001. Despite their differences, the political parties were able to reach agreement on important issues, including on fiscal policy, education, welfare, the environment and protecting Americans with disabilities.

 

An era of folly began in the new century. Leaders of both political parties supported China's entry into the World Trade Organization on terms that allowed a flood of cheap imports, contributing to a loss of 5.7 million manufacturing jobs (one-third of the prior total) between the end of the Clinton administration and January 2010. Few displaced workers received help making the transition to new jobs, and many suffered a decline in their standard of living, laying the foundation for an era of populist resentment.

 

The 9/11 attacks devastated the nation. President George W. Bush's overreaction was also damaging. Any president worth his salt would have struck back against the terrorists who killed thousands of Americans. But the Bush administration went much further, launching a prolonged war in Afghanistan and Iraq and eventually proclaiming the grandiose goal of "ending tyranny in our world." By focusing so much attention and resources on the "global war on terror," America all but ignored the rising threat from China, whose economic gains were translated into a massive military buildup. The Mideast campaigns soured many Americans on international engagement.

 

America's fiscal situation also deteriorated. In January of 2001, the Congressional Budget Office projected that the budget surpluses of President Bill Clinton's second term would continue throughout the next decade, totaling $5.6 trillion and erasing the national debt. Nineteen months later, the CBO predicted that big tax cuts, higher spending and lower economic projections would eliminate the surplus for 2002 and several years thereafter. As it turned out, fiscal 2001 was the last time the federal government ran a budget surplus, and the chance that the debt will ever be erased is slim.

 

Economic mismanagement extended to financial markets. Federal Reserve Chairman Alan Greenspan and other financial experts argued that self-interest would lead banks and other organizations to avoid taking on excessive risk. After the collapse of major Wall Street firms triggered a financial crisis and a punishing economic downturn, Mr. Greenspan admitted error. But the damage was done. The recession's effects lingered for years, and the credibility of market systems worldwide took a hit from which they haven't fully recovered.

 

By 2010, polarization had sharply increased, diminishing the federal government's ability to act unless a single party controlled the presidency and both chambers of Congress. Faced with legislative opposition, presidents of both parties resorted to governance through executive order and regulation. The resulting expansion of presidential power, which President Trump has accelerated, has distorted our constitutional order.

 

Gridlock in Congress has allowed many problems to languish unsolved. Efforts to deal with fiscal policy, entitlements and other critical issues have floundered. Take one example: Mr. Trump can enforce current immigration laws, but long-term immigration reform would require new legislation.

 

The Covid-19 pandemic triggered another round of mismanagement. Mr. Trump deserves credit for fast-tracking vaccine development, but his advocacy of untested remedies weakened public confidence in government recommendations.

 

The Biden administration made matters worse. Its public-health measures harmed the economy, education and individual liberty. As a result, confidence in experts and institutions suffered a blow from which it will be difficult to recover.

 

Some European countries did better, reducing Covid-related deaths without shutting down economic and social life or closing schools for an extended period.

 

Today, pressures are mounting on every side. Young families can't afford to buy homes. Americans 80 and older, whose numbers are projected to increase from 14.7 million to nearly 23 million over the next decade, will put unprecedented pressure on our healthcare system. Unless Congress takes action, the Social Security and Medicare trust funds will run out of money by 2033. Mr. Trump has weakened our allies' confidence in America's support, and China's military buildup, as outlined in a recent Defense Department report, is deeply concerning.

 

This century had a rocky start, but that doesn't mean Americans can't turn things around. We need political leaders to take on these tough problems and bring both parties to the table to solve them. Only then will America's 25-year decline end and recovery begin.” [1]

 

1. Politics & Ideas: America's 25 Years of Decline. Galston, William A.  Wall Street Journal, Eastern edition; New York, N.Y.. 31 Dec 2025: A13.