Here’s a general vision the specifics of which may become the subjects of future blog posts. It is currently May, 2010.
U.S. political predictions
In November, 2010, Republicans will take back the house, while Democrats will continue to hold the Senate 51-49. While they get in many fights with Obama, most voters will not be aware that the Republicans have taken back Congress, just as most voters were unaware that Democrats controlled Congress after the 2006 election. This leads to
November 2012- Republicans gain a small number of House seats over their already decent sized majority, mostly due to redistricting. Gains are limited by Obama’s performance, and the Democrats do better than in 2010. Nevertheless, Obama loses about as bad as McCain did in 2008 to Mitch Daniels, former governor of Indiana and dark horse winner of the Republican primary, who is greatly successful in Midwestern swing states that are relatively old, white, and gun-loving. In the Senate, Obama again holds back Republican gains, but the territory is unfavorable for Democrats in 2012, and Republicans regain the Senate, 57-43.
In 2014, Republicans have about a 50-50 shot of picking up a 60 seat super majority in the Senate thanks to favorable terrain, but lose a significant number of house seats, nevertheless retaining the majority.
In 2016, Daniels is reelected, but Republicans lose their supermajority of Senate seats. Losses are contained by Daniels’ reelection.
In 2018, Republicans lose control of both houses of Congress.
In 2020, Vice President Bob Corker, seen as a moderate, wins against a hopelessly liberal candidate, but the performance of the economy and his willingness to raise taxes with his Democratic Congress leads to
2024- Total takeover of government by Democrats, excepting the Supreme court, which now has a 6-3 conservative majority.
2026- Democrats lose control of the House of Representatives.
2028- Democratic President re-elected.
U.S. domestic policy predictions-
2011- Supreme Court rules very narrowly against some parts of the legislation, signaling its opinion of the constitutionality of the legislation and the future direction of the Roberts Court, but leaving room for the political process to work. Meanwhile, Republicans block some aspects of the implementation of the Obamacare law, particularly the expansion of the IRS.
2012- School voucher programs become increasingly popular among inner-city Democrats, leading to implementation in a growing number of school systems over the next several years. Implemented first in the nations’ worst school districts, they cause a distinct decline in public school participation rates, but performance increases dramatically and public schools even in the worst districts begin to win back students by the end of the decade. By 2020, grade school education in America has undergone vast transformations and substantial improvement against other nations’ students is seen, no thanks to any federal program.
2013- A replacement health care law is passed which creates a tax subsidy to equalize the tax treatment of individually purchased health care plans and employer provided health benefits. It also creates a means-tested subsidy to purchase insurance and allows the purchase of health insurance across state lines. The face of US health insurance changes dramatically over the next several years as employers offer incentives for employees to switch to private coverage. Many people choose high-deductible plans that cover primarily catastrophic expenses, combined with Health Savings Accounts to cover the deductibles. These plans encourage people to avoid unnecessary expenditures by moving away from any sort of third-party payer plan. As health costs dwindle, they make room for increased consumer spending, driving the economy, and as the demand for front-line physician services decreases, the costs of medical research also begin to decline.
2013- Growth-enabling tax cuts passed reducing dividend, capital gains, and corporate rates, reducing marginal rates to Bush era levels, and eliminating the estate tax.
2014- An immigration bill passes which provides for a completed wall, an amnesty contingent on specific goals of reductions in illegal border crossings, and a guest worker program with eventual path to citizenship which institutionalizes high levels of immigration from south of the border nations. Immigration after this is high, but controlled, and the foreign-born population stays not much under 20% for decades to come.
Early 2018- Claiming a mandate from successful and popular health insurance reform and a strong economy, Republicans attempt Social Security reform modeled after the reforms in Chile and other South American nations. Benefits are “guaranteed” not to decrease under the plan, but nevertheless the debate mirrors that of the Obamacare debate. It is passed, just barely. However, the unpopular bill increases the deficit significantly in the short term, and contributes to Republican losses in 2018.
2023- After recovering from a mild recession and long jobless recovery resembling that after the dot-com bust, Corker and the Democrats reach a deficit reduction agreement focused primarily on raising taxes on the top two brackets. Corker in doing so breaks his promise to not raise taxes, which becomes an issue in the 2024 election campaign. Corker is like Bush 41, and his opponent a New Democrat like Bill Clinton.
2025- A VAT is introduced by the “New Democrat.”
2027- Continued strong economic growth amidst the higher taxes and restrained Congressional discretionary spending leads to a balanced budget.
U.S. foreign policy predictions-
2010- Obama has already begun walking back his promises of withdrawal from Afghanistan. Expect the “surge” troops to stay there to replace waning involvement of our NATO allies after 2011.
2013- With Republicans in charge for the next decade, there will be no withdrawal from Afghanistan. A winning strategy focused on nation-building is eventually found and executed with plenty of time to work. After more than twenty years in Afghanistan, no one any longer expects the US to ever leave and the insurgents are demoralized. Pakistani cooperation increases in response to rising confidence that it will not have to work with a resurgent Taliban, and violence ebbs dramatically by late this decade. Despite the decrease in violence, significant numbers of US troops remain on the ground for several reasons: 1) to ensure that the peace lasts and that economic and social development continues so that Afghan peasants are never again a threat to the US, 2) in response to the expectations of Pakistan and India, and 3) because it is strategically located bordering Iran, the rebellious Islamic Xinjiang province of China, and near Russia’s soft underbelly of a southern border.
Iraq- US troops never leave Iraq in the foreseeable future either. A small, non-combat contingent similar to those in Europe, Japan, or Korea remains because it is in the interests of the US and Iraq. The US has another base from which to exert its influence in the Middle East, while US troops strengthen Iraq’s independence from regional powers and increases its security and power in the region as well.
Iran- The regime collapses when the price of oil collapses in the latter half of this decade. The Iranian people are surprisingly efficient at organizing a new government and securing nuclear warheads.
North Korea- no change. China will not allow North Korea to fail, and the US is unwilling to invade. Basically, China knows North Korean failure decreases their security vis a vis the US, and the US knows invasion will be costly and deadly and probably reduce US security in the big scheme of things. No one wants to deal with the consequences of regime change in North Korea, probably South Koreans least of all.
Pakistan- Cooperation in the fight against the Taliban yields Osama bin Laden in the first half of the decade. Cooperation is bought with US commitment to Afghanistan and promises of a civilian nuclear deal similar to the one the US has inked with India. Pakistan also begins detente with India which is easier after terrorism in the area is under better control towards the second half of the decade.
Free Trade Agreements-
2013- Agreements signed with Columbia and Peru are finally passed. The US and Japan both join the Trans-Pacific Partnership Agreement, a free trade area encompassing Australia, New Zealand, Singapore, Vietnam, and Peru, among others.
2015- Thanks to the politics of deficit reduction, the US and Europe agree to drop agricultural subsidy programs in a breakthrough that leads to completion of the Doha round of WTO trade negotiations. 2015-2020 More impressively, this paves the way for adoption of a Free Trade Area of the Americas within two years. It also leads to the accession of India to the TPPA, which spurs most East Asian nations to follow suit in the next few years for fear of losing to Indian competition. The US also concludes a free trade agreement with the EU in response to concerns from the US business community after Canada signs a deal with the EU. Thus by 2020, the US is in Free Trade Areas with Europe, the entire Western Hemisphere, and East Asia. Europe lags in these regions, but leads in free trade with the Russian bloc, which is not part of the WTO, and with Muslim nations.
Post 2020- The US takes a breather from new free trade agreements, but progress continues on the next round of WTO talks. Trade is free enough at this point that additional gains for the US from new free trade agreements are limited, which contributes to a lack of urgency on the matter.
The Global Economy-
2010-2030- Rates of growth decline from 11% towards a more moderate 8%. After 2020, China begins importing more capital as it becomes more developed than the world average, and the increasing volume of the markets for Chinese securities and expectations of a never-ending rise of the yuan contribute to the rise of the yuan as a reserve currency, without a corresponding decline in the use of the dollar as a reserve currency. High savings rates by other nations in Asia and Africa replace Chinese outflows in keeping world interest rates low.
India- Growth continues at the roughly 10% per year pace it has been until 2030.
Africa- First a few, then more and more countries begin experiencing East Asian growth rates over this decade, with growth expanding and solidifying in the next decade. The African Union begins to play a greater role in African affairs. Most growth is due to government reforms, rising demand for commodities from Asia, and increasing and increasingly effective and profitable foreign efforts at development led by a competition for influence between China and other nations.
The Middle East- Already a basket case, the economies of these nations collapse with oil prices towards the latter half of this decade. EU efforts to contain immigration levels and Islamic extremism in the third decade of the 21st century begin to bear fruit by 2025. Here, the examples of Turkey, Iraq, Iran, Indonesia, Pakistan, Morocco and other democratic Muslim nations proves crucial to containing the problems resulting from massive unemployment and youthful populations. The EU and the Middle East become increasingly intertwined. This is due to the EU’s first foreign interventions being in several Middle Eastern nations, the emerging democratic values in the Middle East, high levels of Muslim immigration to Europe, and high levels of European investment in Middle Eastern nations.
Russia- The Russian economy collapses along with the Middle Eastern economies and for the same reasons. The EU quickly takes advantage by extending its economic and political influence right to Russia’s borders under the cover of expanding trade between the FSU (Former Soviet Union) and the EU.
Latin America- The collapse of Hugo Chavez’s government in Venezuela after oil price declines is compounded by the collapse of the communist Cuban government with the death of Raul Castro is of a piece with the rest of Latin America’s swing to the right in Brazil, Chile, Argentina, and other nations. The collapse of the Latin American left is integral to the passage of the FTAA, and results in strong growth in the region over the entire period.
The Developed Economies:
2012- The US finally begins to see significant declines in the unemployment rate. The EU does not, nor does Japan. New electric vehicles are constantly sold out and enjoy popularity far beyond their ability to save money, even though oil and gas prices remain high. This leads to massive R&D expenditures which result in greatly improved battery and general electric vehicle performance.
2013- Natural economic growth picks up strength in the US, while tax cuts and health care reform give a competitive edge to the US economy leading to exceptional growth for the rest of the decade of over 4% per year on average.
2015-2020 New electric vehicles are by now clearly superior to gas-powered ones, leading oil prices to begin an accelerating decline. This boosts growth in developed economies over the next five years, as do a spate of new free trade agreements. Japan finally sees a return to strong growth after more than 20 mostly stagnant years.
2018- US Social Security reform, implemented partly to avoid the cuts seen in Europe, causes the shrinking deficit to begin rapid expansion again, but deficit spending is good for economic growth for the next two years.
2020- The natural business cycle tips the US into a slowdown, which exacerbates the deficit and causes interest rates to rise on government debt. The EU member nations had been kept afloat by strong global growth, but now start hitting the wall on debt, and the government of the EU forces painful cuts in member nation entitlements that are necessary, but growth killing. The aging population of Europe does not retire in near the comfort they expected because of the demographic crisis which their governments have ignored for years. France, England, and the less developed formerly communist states are standouts. The combined effects of rising interest rates on government debt and recession in Europe cause the US to enter a mild recession by 2021.
Post 2020- Employment growth lags economic recovery, but nevertheless the economy of the developed nations enters another long expansion, though growth in the US is not as robust as in the previous expansion.
2013- Private human flights to the ISS begin.
2013- Mobile internet hits Africa, causing an explosion of firms to provide education and other information services to Africans.
2015- Electric vehicles are seen as superior to gas-powered vehicles.
2015- Private human flights to Bigelow’s first operational orbital hotel begin. These are used for tourism, science, and manufacturing, and seats go to the highest bidder.
2020- Bigelow puts one of his hotels in a earth-lunar figure eight style orbit. NASA launches the first orbital propellant depot.
2021- Hitching a ride on Bigelow’s hotel and using a privately developed lunar lander, NASA sends astronauts back to the moon to test new fuel and oxygen production techniques using local resources.
2025- NASA finishes orbital assembly of a Earth-Mars cycler that will allow slow, but cheap, efficient, and sustainable human access to Mars.
2025- First profitable commercial scale fusion power plant built. Fusion will rapidly begin to displace all other forms of energy generation on earth.
2030- General AI has been developed by this time, and bio-tech and nanotechnology have experienced huge breakthroughs. All three will pay dividends over the 2030s in areas such as life extension, health care cost savings, nano-scale manufacturing, direct brain-computer interfaces, advanced understanding and control of biology and chemistry, and advanced understanding of physics and materials science. This is the beginning of the singularity, the slow take off that will take the second half of the century beyond my, or any other mere human’s, ability to predict.
If the world sees another war between major powers, it will be between China and other nations around 2030. This is due to the fact that China will reach its peak share of GDP compared to the allies it will likely face around this time. The rising nation is historically the aggressor nation, and so the allies will not attack China, and China would be stupid to attack much before 2030 because it would lose. Similarly, if it waits long after 2030, its demography will slow it down greatly and India will begin to catch up and make Chinese success in war exceedingly unlikely. While I think such a war is unlikely, I think it would be very interesting to imagine how it would play out with the future military technologies of laser missile defense, orbital attack platforms and military spacecraft, soldiers with exoskeletons, unmanned ground vehicles, unmanned aerial combat vehicles, rail guns, etc., etc.
There is also the possibility of a Chinese war with Russia over the Russian Far East. With Russia weak, China strong, and Chinese immigrants an increasing proportion of the population of the resource-rich Far East, China may think the war worth it if it can hold down on successful Russian nuclear strikes. There are fewer than 10 million ethnic Russians east of the Ural mountains, and the number is dwindling. This war would likely happen sooner than 2030, perhaps even before 2020, but it is dependent on the early development of effective Chinese missile defense systems, or a substantial lessening in Russian nuclear preparedness combined with a surprise attack.
Update: I now think it more likely that Paul Ryan will become the Vice President. I am more confident than ever that Mitch Daniels will be our next President.