How America Is Shredding Its Own Golden Ticket
- Gael MacLean
- Sep 28
- 12 min read
The real cost of America's "Temporary" sacrifices
There’s something almost surreal about watching a superpower dismantle its own success. Not through external pressure or inevitable decline, but methodically, policy by policy, like someone taking apart a Swiss watch with a sledgehammer.
America’s prosperity since World War II rested on something more sophisticated than military might or natural resources. We built what economists now recognize as the most elegant wealth-generation system in history: a global architecture where other nations essentially paid us to be rich. And we’re tearing it down.
How the Machine Actually Worked
The foundation was laid in 1944 at a New Hampshire resort called Bretton Woods, where delegates from 44 nations hammered out the post-war economic order. The conventional story focuses on exchange rates and the gold standard, but the real achievement was more subtle: America became the world’s banker, with the dollar as the global reserve currency. According to Barry Eichengreen, the Bretton Woods system operated successfully due to three factors: “low international capital mobility, tight financial regulation, and the dominant economic and financial position of the United States and the dollar.
This wasn’t traditional imperialism. We didn’t need to occupy territory or extract tribute. Instead, we created a system where everyone needed dollars to trade with each other. It was like being the only bank in town, except the town was the entire world.
The Marshall Plan, which rebuilt Europe with over $13 billion in aid, wasn’t charity. It was investment. We created customers for American goods while ensuring European prosperity remained tied to American success. Research shows that Europe and the rest of the world were the big winners of the Bretton Woods agreement, both in the period during the agreement and from then onward, while the U.S. lost around 4.5% of consumption because of participating in the agreement. But that “loss” was the cost of becoming indispensable.
French officials in the 1960s called it America’s “exorbitant privilege”—the ability to print money the whole world needed. The same complaint was echoed decades later by the Governor of the Central Bank of China in 2010, showing how consistently other nations have recognized this advantage.
The Current Demolition Project
Now we’re watching that system get dismantled in real time. The numbers are stark.
The administration has imposed sweeping tariffs under the International Emergency Economic Powers Act, hitting Canada with 35% duties, Switzerland with 39%, and Taiwan with 20%. A baseline 10% tariff now applies to most countries, with higher rates for major trading partners. What began as threats became reality throughout 2025, fundamentally reshaping global trade relationships.
The Penn Wharton Budget Model projects Trump’s tariffs (April 8, 2025) would reduce GDP by about 8% and wages by 7%. A middle-income household faces a $58K lifetime loss. That figure will rise if the economy continues to spiral. The price level from all 2025 tariffs rises by 1.8% in the short-run, equivalent to an average household cost increase of $2,400 in 2025.
Global trade is severely affected by the tariffs, with trade flows contracting by between 5.5% and 8.5% relative to the pre-shock economy. We’re building walls around the very system that made us wealthy. The effect on allies has been particularly destructive—these aren’t adversaries being targeted, but friends and democratic partners.
The price surge families are experiencing isn’t imagination—it’s measurable reality. The Consumer Price Index shows how dramatically costs have accelerated since 2020, with the steepest climb occurring precisely when the policies described in this article took effect:
The Alliance Structure Crumbles
The military side is equally telling. Europe’s biggest military powers are drawing up plans to take on greater responsibilities for the continent’s defence from the United States, including a pitch to the administration of President Donald Trump, for a managed transfer over the next five to 10 years.
NBC News reported in April 2025 that the U.S. is likely going to cut 10,000 or more of the nearly 85,000 American troops stationed in Europe. The U.S. is looking to relinquish its top military leadership position within NATO. The moves come amid a series of other signals by the Trump administration that the US role in NATO is diminishing.
This isn’t just about military strategy—it’s about dismantling the infrastructure that has given America outsized economic influence for decades, including billions in defense spending that has historically flowed through American contractors and supported US strategic leverage in trade negotiations. Military presence has historically provided the leverage that helped secure favorable trade deals, maintain the dollar’s dominance, and ensure American companies got preferential treatment in European markets. When we retreat militarily, we lose the economic advantages that came with being indispensable
European leaders are responding with remarkable clarity. As Poland’s Prime Minister put it: “Europe as a whole is truly capable of winning any military, financial, economic confrontation with Russia - we are simply stronger. We just had to start believing in it. And today it seems to be happening.”
The Economics of Self-Destruction
What’s particularly striking about this moment is how it violates basic economic logic. Canada and Mexico are very close to declaring official recessions, while growth projections have been downgraded across Europe, China and emerging economies, primarily in Asia. Global real GDP growth has slowed significantly through 2025, reflecting the cascading effects of trade disruption.
But America isn’t immune to the damage it’s causing. The 2025 tariffs have reduced U.S. economic growth by 0.7 percentage points—meaning the economy is growing much slower than it would have without the tariffs. In the long run, the U.S. economy remains persistently 0.4% smaller—the equivalent of $110 billion in lost economic output annually.
The manufacturing revival promised by tariff supporters hasn’t materialized. While some basic manufacturing sectors show modest gains, advanced manufacturing has declined by 2.8%. More telling, the higher costs and economic uncertainty have made it prohibitively expensive for companies to build new plants or expand operations. Construction sector output has contracted by 3.5% as businesses postpone major investments. Companies that might have considered reshoring production are instead waiting out the instability or looking elsewhere entirely.
The distributional effects make it worse. Tariffs are a regressive tax, especially in the short-run. This means that tariffs burden households at the bottom of the income ladder more than those at the top as a share of income. We’re making ourselves poorer while making life harder for working families.
But the damage goes far beyond the tariff numbers. Rising shipping costs ripple through every sector, pushing up prices on everything from groceries to construction materials. The unemployment rate has risen 0.4 percentage points through 2025, with payroll employment down 456,000—real people losing real jobs while being told this is temporary pain for long-term gain.
The business community isn’t buying the “temporary” narrative. According to surveys conducted between May and June 2025, 76% of first-party vendors selling on Amazon expect higher tariffs to lead to higher costs of goods, while 63% of professionals overall expect consumer prices to increase. These aren’t abstract economic predictions—they’re the assessments of people actually moving products through the economy.
The data confirms what families already know from their bills:
Small businesses—the backbone of local economies—face impossible choices as tariffs drive up costs for imported materials and components. Since the tariffs took effect in early 2025, hundreds of small manufacturers, retailers, and service providers have closed their doors, unable to pass higher costs onto customers who are themselves struggling financially. Those that survive often cut staff or reduce hours, creating a ripple effect through communities that depend on these enterprises for both employment and local commerce.
The agricultural devastation is particularly acute. Farm bankruptcies jumped 55% in 2024 as farmers already struggled with high interest rates and volatile commodity prices. The 2025 tariff policies have turned a difficult situation into a crisis, with the trend accelerating dramatically as China—once the largest buyer of U.S. soybeans—has halted purchases entirely, turning to Brazil and Argentina instead.
Small farmers who voted for these policies thinking they would strengthen American agriculture are watching their family operations, some generations old, disappear. “Immediately when we got the news about tariffs, the prices we received for our crops dropped by almost five percent” in just 24 hours, reported one Iowa farmer whose family has been farming for over 150 years. Meanwhile, fertilizer costs have soared—with potash prices jumping over $100 per ton due to tariffs on Canadian imports—squeezing farmers between plummeting revenues and rising costs.
Healthcare costs compound the problem. When employment drops and employer-sponsored insurance disappears, families face impossible choices between medical care and other necessities. Meanwhile, public health programs face budget pressures as resources get redirected toward enforcement rather than care. As millions lose coverage due to job losses and program cuts, the remaining insured population faces higher premiums to compensate for the shrinking risk pool.
Education funding suffers similar pressures. As states tighten budgets and federal priorities shift toward immigration enforcement, school systems lose resources just when economic instability makes education more crucial for families trying to maintain their footing. We’re cutting funding for the very schools that should be preparing the next generation.
What Strong Nations Do
Here’s what policy makers seem to misunderstand: strong nations don’t tolerate bullying indefinitely. They adapt. They innovate around problems. They build alternatives.
European leaders are responding with remarkable speed and determination. In March 2025, European Commission President Ursula von der Leyen proposed an $840 billion defense buildup plan, including relaxing EU debt rules to free up over $680 billion for military spending. Germany’s incoming chancellor Friedrich Merz—historically a strong Atlanticist—now calls for German “independence” from the United States. The UK and France are working on deploying British peacekeepers to Ukraine, developing capabilities that bypass American involvement entirely.
Meanwhile, Asia is building alternative financial systems. China and other nations are expanding trade in their own currencies, reducing dependence on the dollar. The Global South is increasingly turning to regional partnerships that bypass traditional Western institutions entirely. What started as a response to American hostility is becoming a parallel global economy.
The world is learning to function without American leadership. And once that lesson is fully absorbed, there’s no undoing it.
This global adaptation creates the conditions for America’s own resource extraction problem at home.
The Resource Extraction Problem
The benefits of this destructive approach seem concentrated among those positioned to profit from short-term extraction rather than long-term prosperity. It’s hard to escape the conclusion that we’re strip-mining the future to pay for the present, and the present increasingly belongs to a smaller and smaller group of people.
The beneficiaries of this approach are increasingly clear: those positioned to profit from enforcement contracts, resource extraction, and financial speculation rather than productive economic activity. The extraction model favors sectors that can capitalize on short-term disruption—private prisons, enforcement technology, commodity trading, digital currency—while systematically undermining industries that depend on stable, long-term relationships and supply chains. The labor market faces deliberate disruption through deportation policies that remove workers from essential industries—agriculture, construction, healthcare—creating artificial shortages that drive up costs for everyone.
The economic damage extends beyond direct enforcement costs. Tourism has declined as visitors fear border complications, reducing revenue for hotels, restaurants, and attractions across the country. Universities face budget crises as international students—who pay full tuition and help subsidize American students—choose other destinations. These students alone contributed billions annually to local economies while requiring no taxpayer investment in their K-12 education.
This isn’t creative destruction in the Schumpeterian sense—the process where old industries get swept away to make room for more efficient innovations. It’s just destruction. Environmental protections get rolled back, social programs get cut, alliances get strained—all in service of an economic model that resembles mining more than building.
The ideology driving these choices consistently prioritizes enforcement and extraction over the very foundations of American wealth creation: productive investment in human capital and infrastructure. Cutting education while economies demand higher skills, crumbling roads and bridges while global competition intensifies, reducing research funding while innovation drives growth, dismantling green energy industries while handing $40 billion in subsidies to oil, gas and coal companies—these aren’t just policy mistakes, they’re attacks on the core systems that generate prosperity.
The View from Here
The human cost becomes clearer when you look beyond the aggregate numbers. Families watching grocery bills climb while wages stagnate. Workers losing employer-based health insurance just as medical costs spike. Students facing reduced educational opportunities as schools cut programs. Communities watching essential services disappear while enforcement agencies get budget increases.
Direct trade between the US and China may collapse, while indirect exports of Chinese products to the US will be far less affected. The tariff escalation could also distort production patterns and drive a sharp reconfiguration of global value chains, resulting in a less efficient and more opaque trade system.
The environmental costs compound the economic damage. Policies that prioritize short-term extraction over sustainable development are accelerating climate-related economic risks—from infrastructure damage due to extreme weather to agricultural disruption. The same “strip-mining” mentality that’s dismantling trade relationships is being applied to environmental protections, creating future costs that will dwarf today’s tariff revenues.
The effects are already hitting families directly: insurance costs are skyrocketing due to climate-related disasters, and many people can no longer afford to rebuild their homes after floods or wildfires.
Perhaps most tellingly, the national debt continues to explode despite rhetoric about fiscal responsibility. The Congressional Budget Office projects the federal deficit at $1.9 trillion for 2025, with debt held by the public rising from 100% of GDP this year to 118% by 2035—higher than any point in the nation’s history except the World War II peak.
The bond market - often called the smartest money in the room because traders risk real capital on economic forecasts - is already signaling concern about America’s fiscal trajectory. When professional investors start demanding higher rates to lend money to a government, it’s because they’re worried about getting paid back.
The fiscal recklessness is measurable. The One Big Beautiful Bill Act alone will add over $700 billion in interest costs to the $3.4 trillion price tag:
Interest payments on the debt already consumed $882 billion in 2024 alone—more than spending on Medicare and national defense combined—and are projected to grow even larger as the government borrows nearly $2 trillion more in 2025 to help fund tax cuts for the very wealthy. It’s one thing to ask people to make sacrifices for sound fiscal policy, but it’s another thing entirely to ask them to tighten their belts while the government goes deeper into debt to benefit those who least need help and fund policies that are actively damaging the economy. That’s not fiscal conservatism—that’s fiscal recklessness disguised as responsibility.
The spending priorities tell the story: follow the money—and the trail leads to enforcement contractors, private prison operators, and surveillance technology companies rather than the teachers, engineers, and researchers who actually build prosperity. As Senator Jeanne Shaheen noted, the administration is ‘attempting to raid programs that Congress has authorized and appropriated to strengthen democracy, advance peace and support vulnerable communities and instead funnel that money into an unaccountable slush fund.’ This isn’t just poor prioritization—it’s the systematic looting of productive programs to feed extraction industries.
What we’re watching isn’t decline in the traditional sense. Great powers have risen and fallen throughout history for various reasons—overextension, technological disruption, demographic changes. This is different. This is a conscious choice to dismantle the very machinery that created American prosperity while telling people their sacrifices are temporary and necessary.
The post-war system worked because it was genuinely beneficial for most participants most of the time. It created what economists call a positive-sum game, where American success reinforced global prosperity, which in turn reinforced American success. But when you transform that into a zero-sum extraction operation, you don’t just change the rules—you destroy the game entirely.
The tragedy isn’t that American dominance was always going to end. The tragedy is that we’re choosing to end it, because some people wanted to cash in the golden ticket all at once for themselves rather than preserve the lifetime of benefits it was designed to provide for the entire country.
Looking back, historians might mark 2025 as the year America chose short-term extraction over long-term prosperity, deliberately destroying the very system that made us rich.
The most successful systems in history collapse not from external pressure but from internal contradictions. America in 2025 is learning this lesson the hard way.
The Good News: it’s not too late to save ourselves. But saving ourselves means looking for the truth behind the propaganda, educating ourselves on the real issues, and voting in every election possible—from school board to city council to Congress. Vote for the person, not the party. Look at what candidates actually do with money and power, not what they promise to do. The golden ticket can be rebuilt, but only if we stop letting people shred it while telling us it’s for our own good.
Don’t take my word for it.
Core Economic Data:
Historical Foundation:
Alliance/Military Shift:
More on Tariffs:
Bankruptcy in the US:
Farm Bankruptcies in 2025 Already Exceed 2024 Levels July 15, 2025
Immigration Enforcement:
National Debt:
Current Policy Impacts:
Article image ©2025 Gael MacLean
