Back in the 70s and 80s, the USSR’s economy was in terrible shape. It hadn’t always been, that’s a triumphalist myth: for a long time it out-performed the West, and economic textbooks of the 50s discuss the problem that the Soviets were growing faster than we were.
So Reagan’s administration came up with a plan: they’d increase defense spending, the Soviets would have to do the same, and the strain would screw over their economy. There’s various arguments, but it seems to have worked.
Recently Trump suggested that Russia, America and China all cut their defense spending in unison. Russia was interested, China said no.
Now, of course, the US spends way more than anyone else on its military, but that’s mostly because it over-pays for everything because of vast corruption.
But the real issue here is that China is a rich state, and the US is not. Forget GDP, it’s completely misleading. China is ahead in everything that matters: 80%+ of tech fields, has more population and the largest industrial base in the world and it’s the main trade partner of more nations than anyone else, including America.
This graphic is illustrative, but it applies to everything except planes and launch capacity, and soon it will apply to them too:
As Keynes once said, “we can afford anything we can do.” The corollary is that we can’t afford anything we can’t do. China can afford almost anything because it can do almost anything. Within four years it will have cheaper and more lift capacity than the US. Its civilian airliner industry is taking off, it’ll take longer, and the competition is Airbus, not Boeing, but they’ll win that competition too: even if Airbus avoids the Boeing quality collapse, Chinese jets will be cheaper and about as good.
China can easily afford its military budget. I’d guess it could double or triple it and be OK. The US is struggling: the Trump cuts are a reflection of that, and are at the same time reducing government capacity, of which China has plenty, and unlike America government, they’re competent and at this point not even very corrupt and what corruption does exist is honest corruption—you can take a cut, but you have to deliver on time and on budget.
So China’s laughing at America. “No thanks. We’ll just keep out-producing you and we know you can’t keep up, but feel free to try.”
The shuttering of the Consumer Financial Protection Bureau will massively hurt low and middle income earners. The postal service changes will lead to many rural Americans having no mail service. Trump’s budget requires massive cuts to Medicaid, which disproportionately helps Red State Republicans.