Being realistic about the risk of U.S. collapse

warning signs and possible scenarios

I came across two pieces about the deep problems the United States faces, which could conceivably lead to some sort of collapse scenario. I may not be American, but the possibility of the USA collapsing concerns me greatly, as in the absence of a US superpower to manage world affairs, we’re likely to see a return of Great Power Politics, where stronger nations strong-arm weaker ones and fight constant wars to carve out and maintain their own field of influence. The best smaller, weaker nations can hope for in such a world, is vassalhood.

We have gotten used to globalisation, where the U.S. navy in particular patrolled the world’s sea lanes and pushed for free trade between all nations, enabling even the smallest, weakest nations to participate in and benefit from world trade, lifting many regions of the world out of poverty and oppression for the very first time. Should the USA collapse or even just retreat from much of the world due to internal weaknesses and squabbles, we will see much chaos and a reorientation of world trade in particular, to favour larger, stronger nations with significant natural resources, industrial and military assets, putting most of the rest in a precarious situation, where their only hope of survival will be to align themselves with a stronger nation or economic-military block.

Firstly, I will quote at length from Dmity Orlov’s blog (it’s behind a paywall), a self-declared collapsitarian, or kollapsnik as he jokingly refers to himself, a keen observer of collapse back from his early days of witnessing Soviet Collapse and noticing the similarities with what is going on in the United States. He lives in Russia with his family and writes extremely well, though you will always find a Russian Nationalist bias in his work. Still, as someone who spent most of his life in the USA, he is a very sharp observer of the realities of US society, politics and economics, so he’s worth listening to, at least on some topics.

It was a disaster 80 years in the making. At the end of World War II, the United States stood virtually alone as an economic power. Accounting for 50 percent of global GDP, it held 80% of the world's hard currency reserves. Fast-forward to 2024 and the share of the US in the world economy has shrunk to 14.76% (calculated from figures provided by the World Bank and the International Monetary Fund).

But even this number is misleading, for fully 20% of the US economy is made of what goes under the acronym FIRE: finance, insurance and real estate. These are unproductive parasites on the productive economy. Another unproductive parasite is health care: ridiculously overpriced, it amounts to almost a quarter of all spending in the US. Neither the resources consumed by FIRE, nor by health care spending, contribute much of anything to the standing of the US within the world economy.

Adjusted for these, the US share of the world economy dwindles to just over 8%. While hardly negligible, this share is nowhere near sufficient to give the US anything like a majority vote or veto power in world affairs. The tragedy of the situation is that the mindset of Americans, particularly those occupying positions of authority in Washington, has been unable to adapt to this development. Their mindset appears to be fixed for all time: they believe that they can still dictate terms to the whole world and finding it increasingly awkward to cover up for the fact that almost the whole world (with some notable exceptions) now feels free to ignore them.

Starting just after World War II, when much of the world's industry lay in ruins, the US was able to make use of its industrial power, supported by its military might, to tilt the economic playing field in its favor. With the US dollar used as the main currency in international trade and, crucially, in oil trading, it was able to maintain a chokehold on international finance and trade by alternately tightening and loosening the supply of dollars. While initially making it possible to exchange dollars for gold, this option was cancelled in 1971. In 1986, the US went from a net creditor (a position it had held since 1914) to a net debtor, making its continued ability to borrow from the rest of the world in its own currency a matter of survival. At the same, the dwindling share of the US in the world economy eroded the effectiveness of US financial warfare, inevitably shifting the emphasis to warfare proper. Maintaining its unrestricted borrowing ability, along with the value of the US dollar, has been made possible through increasingly oppressive and violent means, earning the US the title the empire of chaos.

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the US has failed even in producing chaos. Most nations across the Middle East and Africa (with the exception of Israel/Palestine and Lebanon) are at least superficially stable; Afghanistan is doing much better under the rule of the Taliban and working out large development plans with China and Russia, Iraq is weak but allied with Iran; Syria hasn't collapsed and once again controls much of its territory. But the conclusion is correct, and uncanny: the US has failed even in imposing chaos.

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Examples of disobedience are by now many and varied. The US asked Iran not to ship ballistic missiles to Russia — and Iran does ship them. The US asked China not to supply Russia with manufactured goods and technologies that allow it to skirt sanctions and to conduct its Special Military Operation — and China does supply them. After Nicolas Maduro was reelected in Venezuela, the US asked for this result to be reconsidered and the request was denied. The Houthis in Yemen pay no attention to US efforts to stop them from interfering with Red Sea shipping. US military bases are being asked to leave by several African nations which now prefer to deal with Russia and China. Even Israel no longer bothers to coordinate its actions with Washington, never mind whether or not they hurt Washington's interests.

Gevorg Mirzayan, Associate Professor of Political Science at Financial University in Moscow, has offered three reasons for this pandemic of disobedience.

The first is the rapid shift of national governments toward reasserting their national sovereignty. With Western-style globalization discredited by actions of the United States, along with a major weakening of international institutions (again, due to them having been discredited by the US), governments have been forced to rely on their own resources for achieving their goals. In the process, they became much more active in defending their national interests, inspired by the understanding that nobody else will do it for them.

The second reason was that they were quick to realize that defending their national interests is not as complicated or difficult as it might have seemed at first. Initially, they were fearful of various methods of US retribution — sanctions, humanitarian interventions, bombings, invasions and political ostracism. But Russia demonstrated that they need not fear US and Western sanctions, presenting an example of a developed, internationally integrated economy that could withstand the most powerful Western sanctions in history; all that's needed is political will and national unity. This unity, in turn, can be achieved through demonstrated correctness of political decisions multiplied by feelings of national pride. Looking at Russia's results, other nations, such as China, which until now has tried to avoid open conflict with the US, is working up to a level of political determination needed for direct confrontation.

And then there is the third reason, which is that political figures in the US have, to put it politely, gone completely stupid. The ascent to power of batshit-crazy liberals spouting radical feminism, Critical Race Theory, LGBT nonsense, climate catastrophism, borderless policies, transhumanist nightmares and globalist fantasies has squeezed out the better informed, more practical-minded contenders. As a result, we are seeing the fifth election cycle in the US when none of the candidates are capable of controlling global processes — unable to maintain what various Russian analysts have termed controlled chaos. The controllable chaos they had once tried to create, be it Arab Spring or the color revolutions or attempts to keep Africa and Latin America from drifting away, has rather swiftly spun out of control — out of US control, that is, leaving plenty of room for controlling events from the point of view of more thoughtful, better informed and quicker-thinking politicians in China, Russia, Iran and so on.

But losing control of its adversaries is, to some extent, to be expected and is not even the worst of it. What is even worse is that the Washingtonians are losing control of their allies, upon whose resources they have relied in their now frustrated quest for global dominance.

• Turkey, a large NATO power, is seeking to join BRICS, is working with Russia's Rosatom to build its Akkuyu nuclear plant and is serving as a major transshipment point for Russian natural gas exports.

• Saudi Arabia has refused to extend its Petrodollar Agreement with the US, which expired on June 9, 2024, and is now trading oil with China in yuan instead of dollars while closely cooperating with Russia as part of OPEC+ and also looking in the direction of BRICS.

• Israel — the closest US ally — has essentially taken the US hostage. Its genocidal operation in Gaza has dealt a serious blow to US relations with the entire Moslem world. And now Israeli leader Netanyahoo is attempting to pull the US into a military conflict with Iran.

• Even smaller countries, such as Hungary, Slovakia and Georgia, are refusing to accede to various US demands.

• The worst mutineer of all, from the US perspective, is the Ukraine. The Kiev regime, deprived of sufficient US military and financial support and sensing Washington's weakness as it negotiates a period of severe political uncertainty due to Biden's senility, Harris's manifest idiocy and Trump's unpredictability and tempestuousness, are attempting the same gambit as Netanyahoo — to embroil the US in an armed conflict, but not with Iran but with nuclear-armed Russia.

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Given these developments, what would make the most sense for the US is to attempt to cut its losses. It should try to find a mutually agreeable compromise with its allies and to allow its adversaries to deal with those who are completely out of its control. But such geopolitical stewardship requires sober, pragmatic, well informed leadership — which does not exist in the US.

The alternative is to wait for the inevitable worst case scenario to unfold. Deprived of sufficient US support, the Ukraine and Israel will both fail. Taiwan will rejoin China. Countries around the world will go on ignoring the US. Meanwhile, the US will continue borrowing more and more money (over a trillion every three months) to finance its huge and growing budget deficit (now a third of the federal budget) while rolling over its longer-term, lower-interest debt as shorter-term, higher-interest debt. Newly generated dollars, representing nothing of value, will disappear like water into sand, generating negligible economic activity. No matter how the Washingtonians cook the numbers, pretending that dollar inflation is under control (it is not) or that the US economy is still growing (it is not), the American Empire is at an end. During the end game, it will be not just the adversaries and not just the allies but also US states that will start to splinter off. Perhaps the last place where chaos will become uncontrolled will be Washington, DC. The American dark age that will follow will make an interesting case study for future research.

The whole piece is worth reading, but the above is succinct enough. Even as a non-American, it hurts to read those words, because deep down, despite the obvious pro-Russian sympathies of the author, we know that he is mostly right and he has very deftly and succinctly diagnosed what ails the US empire these days.

On the opposite end of the political spectrum, Umair Haque, a left-wing economist from an Islamic background (lapsed, to my knowledge) gives a very different view as to what ails the U.S. (and the West in general) and I find myself agreeing with most of his analysis as well:

The election. How do you feel about it? Excited? I’d bet…not. I suspect most of us are somewhere between anxious and exasperated.

Me? Here’s how I feel about it. Underwhelmed, maybe. There are die-hards on both sides who are gung-ho about their chosen candidates. And that’s OK. But I imagine there are also a lot of us, caught in the middle, of what feels a whole lot like a failed system. And it’s hard to get too excited about that.

And that’s me. I like Coach Tim, I like Kamala. I’ve even softened on Donald Trump, which is kind of funny. But in all this, I’m…unexcited.

Because I can see what happens next. Which goes something like this.

America’s is going to remain destabilized. In a kind of cyclical way. Into the foreseeable future.

That’s the real takeaway of this election, which I wouldn’t say is going well. Would you? Anybody much feeling particularly happy about any of this?

Trumpism isn’t going to go away with Trump, precisely because its roots lie deeper, and have set in harder. It exists for a reason—a very real one, which at this point, even I have sympathies with. This election isn’t going to…fix the maddening, broken politics which have come to plague America. The Dems, too are just as entrenched, having learned next to nothing from Trumpism’s rise.

And so here I am, and I think many people share this sense, of being underwhelmed.

Is anybody going to fix anything around here? Hey, how are these jokers going to help me?

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The Statistic That Explains Everything Nobody Wants to Talk About

I want to focus on a statistic that more or less explains everything. Yes, really, I know, I know. It’s kind of shocking to me that nobody ever talks about, and so here it is, sort of the elephant, or maybe Godzilla, in the political theater, around which pundits and advisors and candidates perform this weird kabuki ritual, a feel-good charade.

Median incomes for men in America are lower today than they were in 1979.

In 1979.

That’s almost fifty years ago.

I didn’t make this up.

This is a fact.

Our side is supposed to like facts, remember? It’s supposed to be the “reality-based one,” whatever that even means anymore. Our. Side. Is. Supposed. Not. To. Ignore. The. Facts. Wait, am I a Republican now? I’m getting there, I guess.

Because “our” side won’t talk about this statistic, which, like I said, explains everything. Won’t acknowledge it, admit it, even look at it.

Now. I focus on men for a reason. Women started from a very low base, and so while there’s been tepid growth in their incomes, not much, but some, a tiny amount, a few percent, over the last fifty years, that starts from a low base. And it still reflects a very real and pretty large gender gap closing.

So it’s not really so much a gendered statistic I’m discussing, but rather, just a statistic, the key one, pointing squarely to a certain reality.

You know what that statistic says, because we talk about it all the time.

The point is what it means, vis a vis what Democrats want to do. Which is…not much.

They certainly don’t have any vision, much less agenda, to reverse this long-term macro-trend: a half century of stagnation.

What they’re offering instead is sort of what I’ve called the Minimum Viable Future, or Minimum Viable Politics, if you want. So they want to give people a $6K tax break for having a kid. That’s nice, it’s “not nothing,” as we say. But that doesn’t even cover a year’s childcare. It’s a paltry amount, which in economics, we’d call a “signal,” meaning that it has more symbolic value than actual value.

It lets the Democrats say: hey, look at us! We’re doing stuff! See, check us out!

But this isn’t enough.

They don’t have a vision or plan to reverse the biggest macro-trend in American, which is half a century of stagnation. Not even remotely something close to one. They’re tinkering at the edges of a broken social contract, not making anything close to the sorts of fundamental reforms necessary to spark genuine prosperity again, much less protect democracy in a serious way, which we’ll come to.

They’re the Minimum Viable Guys. At least they’re not the fascists! That’s the selling point.

Pretty bleak stuff, if you ask me. Sort of like if you had a restaurant and the Big Idea was that it wasn’t selling rancid food. Well, if there’s nobody else in town, I guess…

Which is the game here, and why the system feels so broken.

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How Stagnation Ignites Cycles of Authoritarian Collapse

Now let’s come to Trump.

The thing—the crazy, maddening, and sort of insane thing—is that Trump is the guy who kind of gets this statistic, and what it means. He understands that times have been incredibly tough for the working and middle class, and he empathizes with them, offers them his support, tells them they can be Great Again, the whole nine yards.

Of course, it’s the same old game—it’s those peoples’ fault, those others, those unwanted ones. But here, I have to admit, even I think there’s an issue with too much unchecked low-quality immigration—we’ll discuss that another time, though. The point I suppose is that scapegoating is scapegoating.

And so we’re trapped in the middle of this insanity.

One side understands the problem: the macro trend of long-run stagnation. But offers up pretty poor solutions.

The other one doesn’t even acknowledge the problem, and pretends that everything’s basically fine, and giving people stuff like not-even-to-cover-a-years-childcare is Major Progress.

Where does that leave us?

I’ll tell you where it leaves me: unenthused.

Because, like I said, I can tell you what happens next. We’ve discussed some of the above before, but now let’s go further.

What happens next? Let’s say the Democrats win. And I’m not saying they will. I wouldn’t put money on it, but we’ll discuss that next time, for now, let’s stick to the future and macro trends.

What’s not going to happen is that the macro trend of stagnation goes away.

Instead, it’s just going to…roll on.

Maybe incomes will go up by a tiny, tiny amount—doesn’t matter, really, that’s just signal in the noise.

Remember—they don’t have a vision or agenda at this level. It’s at several levels lower, the stuff of minor-league tax breaks and so forth. It’s not anything close to “we’re going to lift the incomes of 90% of society by 50% over the next decade.”

And what does more stagnation portend?

More destabilization.

More authoritarianism.

Because the roots of social collapses of this kind are always in stagnation.

Always.

Now, I’ve explained this before, but I’m going to do it again, because in an essay like this, it’s crucial that you really get why.

Here’s a pie. Your slice isn’t growing anymore. It’s shrinking. Maybe the overall pie is growing, but so what? It’s in a weird lopsided way, just for that one guy, who’s eating all of that entire side, leaving you, and millions like you, to….

What do you do when your slice of the pie is shrinking? You have to begin to fight with everyone else. Just to keep it the same as it was before.

There’s no other way.

This is what’s called in economics a “negative sum game,” meaning that the total, or the “sum,” is shrinking.

And this is why societies implode into authoritarianism. People have to fight one another for their slice of the pie, just to keep it the same. No longer does hard work suffice, pay off, get you there. Social norms don’t hold. The peace can’t be kept. Everything frays and decays. Relations of comity and community turn to spite and enmity. Politics becomes fixated on who can take what from whom, whether through scapegoating, purification, or cleansing.

Do you see how stagnation destabilizes societies? This is a story as old as time—it’s what happened in Rome. Caesar gave people, famously, bread and circuses, and it worked, but it worked precisely because stagnation had cast its wicked spell, and frayed the Republic’s confidence, optimism, comity, and institutions.

I really, really want you to understand this, because the mechanism matters.

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When Establishments Fail, What Happens to Societies?

If we understand this mechanism—how stagnation destabilizes societies—then we can see into the future.

Which looks like this. The Democrats don’t do much about stagnation, or at least, offering the Minimum Viable Politics they do, not nearly enough. What happens next? Stagnation just goes right on breeding discontent, fraying bonds, erasing confidence, and tearing society apart. The pie goes right on shrinking for the average person, and they have to continue to fight off everyone else just to keep their slice the same.

And that is how movements like Trumpism come to be.

What all this predicts is that nothing much is going to change anytime soon. If the Dems win, in a few years, it’ll all…happen…all over again. Maybe if Trump is gone, the figurehead will be JD Vance, or any number of other contenders—so what? That doesn’t matter. The point is for you to understand the future, and what shapes it, and in this case, what our little analysis tells us is that destabilization is going to just go on, because…

Nobody is fixing the problem.

And that’s why I’m unenthused. Unexcited. I think a lot of people are, because they have this sense, intuitively, even if they can’t use all the jargon and concepts I did, which, to be frank, are unimportant, the point is just to understand it.

The point isn’t that I don’t care about women’ rights or minorities or anything of the kind—wrong, I do. It’s that it’s going to happen all over again, two, four years from now, four years from then, and so this threat will just remain ever-present, until we solve the problem of stagnation, and in that sense, this is all pretty…groan with me…useless.

Yes, it buys you a little time, but that’s a pretty low bar, when you’re still on the road straight to hell. The point is to get the hell off that road.

So here we are.

Neither party seems to care very much, or offer a compelling vision for this central question: “how are we going to raise incomes, which have stagnated for half a century, by 10, 30, 50%, over the next decade, for 90% of society?”

If anything, I think that Trump cares more about that question than the Dems. Which is a sorry and funny thing to have to say, but hey, do you want me to lie to you? I know, don’t answer that—I probably should. Go ahead and chuckle, but at least Trump is concerned with growth, and no, growth isn’t automatically a bad thing, though of course this form of carbon-fueled growth is, which of course brings us back to Trump’s many, many flaws, all of which leave us right back at square one.

Uninspired.

What do you do when a politics fails this badly?

You see, what shocks me, and it really does, is that nobody will even talk about this statistic. Nobody. I turn on CNN, and there’s a rotating cast of characters, pundits, advisors, campaign managers, surrogates, blah, blah blah—and not once have I ever heard this issue mentioned. Same for the Post, the Times, and everywhere else.

I think it’s clear by now that the establishment doesn’t care. Genuinely. It doesn’t want to care, couldn’t care less, doesn’t want to hear it, plugs its ears with its finely manicured fingers, and that’s why Trump is still right where he is, to be painfully blunt with you.

And in that sense, what’s unfolding before us is a game. They want our votes, and they want our affections, even, but mostly for the sake of their own power. They don’t actually intend to fix anything much. They intend to do as little as they can, and stay in power as long as they can, and I think, sadly, that’s true in a sense for both sides, even if, yes, here, I’ll cheer it right along you, let’s roar it together, at least the Democrats aren’t the fascists!

It’s a game. It’s a charade. It’s kabuki played out before Godzilla in the room, so that we don’t notice Godzilla in the room, tearing our lives apart. All of which, if you fall for it, I imagine, makes you the fool.

I don’t mean to sound so negative. These are terrible things to have to say. But hey, this is the business, the job, understanding the future, reading the tea leaves.

It’s not a warning. I don’t do those anymore. It’s just an observation.

What’s this election going to achieve? Not much. And that’s in the best case scenario. In the worst one, well, you’ve already imagined that, so let’s not dwell on it. It just sets up another cycle of destabilization. Which is sort of sad, and kind of pathetic, because hey, call me an idealist, call me a fool, call me whatever you like, but I think we all deserve better than this game, where nothing changes, except for the worse, and that threat is used to sort of whip us into line, or else.

Hey, at least they’re not the…

See that trendline of stagnation? It didn’t care in Rome, it didn’t care in Germany, and it doesn’t care now. The point is to change it, or else, eventually—do I really have to finish that sentence?

Umair’s piece is less about the election and more about systemic problems. All countries have it to a degree, but perhaps the U.S. is unique in that it has an elite that has knowingly and deliberately abandoned the people it rules over. I have a lot of problems with the government here in Hungary, but even its harshest critics can’t deny that it tries, however badly, to champion the nation’s interests and is thinking long-term in terms of what will benefit the country decades down the line. The conclusion it came to, is that closer ties with authoritarian governments like Russia, China and Turkey are in the country’s long-term strategic interest, something I strongly disagree with, but one can certainly see the logic behind their way of thinking.

I gather Orbán thinks, that the West is not long for this world, and he must make alternative arrangements to ensure the survival of the nation should the Western Flank collapse and threaten to pull the country down into the abyss with it. He’s banking on shoring up the Eastern, Northern and Southern flanks, by aligning the country closer with Slovakia, Serbia, Slovenia, but more importantly, with the great powers of Russia, Turkey and China, as well as a host of Turkic republics, which may or may not have historical, linguistic and blood ties with Hungary, but he’s certainly playing it up for political and economic benefit.

The current Hungarian government has also invested heavily in subsidizing the entertainment industry. Hungary’s film industry is the largest on the European mainland, only the British Isle can match it for size, quality, pool of talent and the availability of large studios, four at last count. Significant subsidies and tax breaks have also attracted significant investment from China and South Korea, to build battery and electric vehicle plants, an area in which Hungary is projected to be second only to Germany, once all the planned projects are online in a few years’ time.

Once again, I am not certain that this is a good strategy for the future, I have serious doubts about the long-term viability and demand for electric vehicles, but it can’t be denied, that this is long-term strategic thinking and hedging your bets, in case your main market and investor, in this case Germany, collapses. Given the catastrophic weakness of the German economy lately, with year two of its ongoing recession, this may turn out to have been a smart move. Only time will tell.

I only mentioned this, to demonstrate what long-term strategic thinking, serving a nation’s genuine interest, would actually look like. The US does not have much of it lately and is being rendered irrelevant on the world stage, especially by its apparent master and string-puller, Israel. One also wonders, if the Biden crime family’s close links to Ukrainian oligarchs, for instance via Hunter Biden’s past role in Burisma, can account for how Ukraine seems to be setting the US geopolitical agenda vis-a-vis Russia and not vice versa. It makes no sense on the face of it, for the USA and Russia to be enemies. Except for the anomaly of communism, which was an existential threat to the American way of life, Russia and the USA have mostly been allies and friends throughout their history as they really don’t have any conflicting interests on the world stage and have managed to coexist peacefully for most of modern history. Despite cold war tensions, the two countries have never fought a serious war with each other, which is not something you can say about Britain, Japan or Germany for instance.

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Apologies for the long hiatus. I have been busy with other things, mostly work-related and I’m also helping my sister out with her doggy-hotel business, since they and her fiancée decided to take an extended break in Mexico, where she owns a couple of properties. Before you get too envious, they were mostly doing home renovation work, with barely any time to actually rest. Most people would have hired a crew to do it, but not them, they’re hardcore and want it to be done properly. The properties look amazing now, so it’s all been worth it. I have been minding some of their own dogs, and a few others, as well as their house over the past few weeks and whilst I love doggies, I’ve got to say, they’re a lot of work.

One of the dogs I’m minding is a pup and can’t be left alone in the house yet, so I’ve been taking him to the office. Thankfully, management is very dog-friendly here, so it’s been going fine. His name’s Cacao and he is a Cavapoo mixed, or rather designer breed.

Here’s Cacao chilling:

And here he is charming my office colleagues:

Taking this dog to the office and on walks in town has been a bit like walking around with a celebrity buddy. Random strangers come up to you and chat you up. Women especially find him irresistible. If you’re ever feeling lonely and crave attention, especially of the female variety, get yourself a dog like this and you’ll be surprised how many people want to come up to you and chat away. It really is the perfect conversation starter and it is actually a bit surprising how differently people treat you as a man if you are taking care of something small, helpless and irresistibly cute.

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A few people who have previously pledged to support me have withdrawn their pledge, which I understand. I haven’t switched on paid subscriptions yet, since I’m still trying to find my voice, my audience and cannot yet commit to a regular posting schedule. I will keep posting here sporadically, whenever I can and with time we’ll see where that takes us. Any feedback is most welcome.

I have also wrote and the abandoned a lengthy post on space aliens. I’m not sure it’s up to scratch. But I’ll revise it somewhat and probably post it later this week.