American scholars criticize "Bidenism" as contradictory: they regard China as a scapegoat

On October 25, the Eurasian Review website published an article titled "The Contradictions of the 'Biden Doctrine': From China's Friction and Excessive Military Expansion to the U.S. Debt Crisis, written by Dan Steinbork, a senior scholar at New York University and Columbia Business School. The full text is excerpted below:

Because of internal contradictions, "Bidenism" is fueling Trump-style "war with China," while its excessive military expansion is also leading to a debt crisis.

Today, more than half of Americans disagree with Biden's performance. He is dividing the country like Trump. What's more, progressives' trust in the U.S. government is fading. The "new Cold War" with China, Russia, Iran and others is not a priority for the U.S. government, but for the well-being of the United States. The White House has fallen into contradiction as it misses the historic opportunity to reformulate U.S. economic and foreign policy on the basis of progress. As it actually turned out, China acted as a scapegoat, as it did during the Trump White House.

The trade war is destroying the U.S. economy

Contrary to successive U.S. postwar Democratic presidents as well as Republican presidents, Trump and his too high tariffs have avoided trade liberalization. Biden's multilateralist rhetoric obscures similar goals that are steeped in economic nationalism and inward-looking trade policies. The practical result is a contradiction between publicly proclaimed multilateral goals and trade wars with other countries.

Another contradiction arises in trade negotiations with China. U.S. Trade Representative Dai Qi claimed that the Biden administration does not rule out the possibility of new tariff measures against China. But the White House is well aware that current tariff targets are not feasible without a global recovery.

These paradoxical routs can be avoided. When Biden was still in the Obama administration, his chief economic adviser was Jared Bernstein, a respected progressive economist. When Trump escalated tariff measures in 2019, Bernstein warned. "It's a mistake: the whole principle may have been misled," he said. If so, it will not help American workers, and as a protectionist act, the cost it inflicts on the population around the globe could overwhelm its benefits. ”

By the fall of 2019, Bernstein declared Trump's trade policy a "disaster" and made six recommendations for the next president to develop it. First, surgically addressable tariff measures may be a useful tool, but tariffs that are too comprehensive undermine the economic recovery. Second, when demand is insufficient and the West is in a secular stagnation, the trade deficit is definitely not a score card. Third, the United States needs to develop export-oriented industry policies, not protectionism. Fourth, effective trade agreements require multiple stakeholders, including developing economies. Fifth, China has not engaged in currency manipulation for years, and Trump is playing with this risk. Finally, the competition of multinationals to the bottom line will not help the laggards; smart tax cuts and subsidized jobs will help.

Debt settlement is looming

Just as the Trump administration introduced a $2 trillion plan to fight the epidemic, Biden has introduced huge direct transfers and tax cuts for workers and the unemployed. While he has passed a $1.9 trillion stimulus package, it is difficult for the government to launch another multi-trillion-dollar infrastructure project. Curiously, some of the contents of the plan are clearly defined as "anti-China measures."

Finally, the real dilemma is that no amount of stimulus spending can compensate for the fundamental contradiction in the Biden administration — sustaining U.S. military spending has been at the expense of welfare for decades.

In fact, the key player in this issue is the current military spending, which exceeds $965 billion. As a result of excessive military expansion, the United States has invested much less in welfare than any other major advanced economy. Here, the broad definition of welfare refers to human resources, government, and infrastructure.

Understandably, the White House has been less outspoken about how to fund the world's largest fiscal package, ultra-low interest rates and quantitative easing. The simple answer is: through debt that will not be repaid, but will be monetized.

Today, U.S. outstanding debt has soared to nearly $29 trillion (126 percent of GDP); that includes public debt ($22.2 trillion, more than the size of the U.S. economy) and debt held by government accounts ($6.2 trillion). In relative terms, the debt held by the public is almost the same as the 1945 WAR debt of the United States.

Otherwise, this borrowing heralds the end of the United States' status as the pillar of the world economy and the dollar's status as the world's leading reserve currency. Since the market is future-oriented, liquidation will not wait until the middle of the 21st century. Reckoning is looming.

In order to postpone the liquidation, the Biden administration needs to keep printing money. When central banks finance public spending, printing money has the potential to trigger hyperinflation.

Make China a scapegoat

Such a trajectory would be detrimental to the major foreign holders of federal debt. There is also a paradox: If China stops buying U.S. securities and/or sells its large holdings of dollar assets, Washington will need other foreign and domestic investors to close the gap, which will lead to higher interest rates.

So if foreign investors reduce their holdings of U.S. assets together, we will return to a collapse, or worse.

Biden's loyalists like to portray it as Truman's reincarnation. This is an image that its think tank encourages to shape. In fact, Biden had hoped to portray himself as the reincarnation of Franklin D. Roosevelt.

"Bidenism" is not a doctrine of geopolitical insight or economic policy. It deals more with political marketing, although doctrine without principles is doomed to fail. As a result, there is a growing populist need to scapegoat China.

Unlike Truman, Roosevelt expected a grand alliance of the United States, the Soviet Union, Great Britain, and China to rule the world after the war. As power gradually disperses, it is precisely this multipolar state that the United States, China, and the world economy need in the 21st century.

Source: Reference News Network