This Quora answer is worth repeating.
It explains why USA was able to build wealth and now cant and why it wants under Trump at least to leave NATO.
…is very simple. NATO became pointless:
At the start, it was created to ‘Keep the Russians out, the Americans in, and the Germans down’, but it had a more important purpose for a long time:
Help protect the reserve currency status of the dollar.
The US would print money like a banana republic without suffering inflation, it would use it for its military spending, it would be the muscle of NATO, and in return, the NATO countries would use the dollar and attach their economies to the US to boost the US. Together they would bash down any smaller country that did not use the dollar and enforce the ‘world order’.
This allowed the US to monetize the entire world’s economic activities wherever they happened. If someone opened a random business somewhere in Africa or Asia and increased his country’s GDP, that GDP would end up monetized by the US through printed dollars because his country had to buy dollars to use in international trade. The European satellites of the US also benefited from this system through their participation and investments in the Angloamerican financial system.
Moreover, this Angloamerican ‘world order’ would force other countries to open up their resources and economy and buy out their resources, companies and even land/housing. A perfect, modern imperial colonialism: Buy out the entire world with the dollars printed on their economic activity.
So everything was great for a while. But then things suddenly started to change:
First, the EU came into being in 1993. The EU countries started closing their economies to the US through tariffs or regulations. Then, the EU backstabbed the US by creating the Euro in 1999. Now the dollar had a major reserve currency competitor. The euro started eating into the dollar’s global share. This caused an estrangement between the US and the EU and it started a low-level trade war, through tariffs, regulations, counter-regulations, diplomatic, political and legal pressure and that has been going on since around 2005.
Then, China and the Asian countries developed. They were protecting their domestic markets to varying levels and prioritizing manufacturing and physical and social infrastructure. This made Asia the biggest economic market whose economic size was backed by actual physical goods as opposed to the increasingly financialized, hollowed-out US economy. The US was able to bash down Japan and shove the Plaza Accords down its throat and cripple its economy. But it wasn't able to do it to the rest of Asia.
Things were not working out. The US elite decided to ‘contain’ (read: make a colony) China. But its pesky friend Russia was a problem and needed to be taken out before taking on China. It was already doing diplomacy and stirring movement for an alternative ‘world order’. So they decided to take Russia out first.
At that point, the US elite made a fatal mistake: They stole not only the state assets of Russia in dollar reserves in the West but also the dollars of the Russian elite. In their out-of-touch narcissist minds, this would cause Russia to collapse within months. It didn’t. Russia did import replacement and integrated with the Global South and its economy got pumped up.
But something collapsed: The Dollar.
Now the entire world and their elite classes saw they could be next. It didn’t matter whether you were a friend - if one faction of the US elite thought it would be profitable to target you or your country, you could end up getting screwed the next time that faction is in power in the US. All of them started to reduce risk by reducing their dollar reserves, moving their money out to other assets and starting to use other currencies in international trade.
Booom - the unused dollars were flowing back home, causing major inflation. The banana republic that printed money without inflation wasn't able to print money without inflation anymore. What followed that has been the most destructive economic crisis the West faced in a very long time. Not a cyclical, profitable crisis. A permanent, systemic crisis. Now the dollar scam was gone for good.
And it's not likely to change. Regardless of what kind of peace and detente is reached with Russia, and even China, ~80% of the world won't come back to the dollar like before. The age of free cash printing machine is over. And it's a good thing too - because that scam caused the US to become a hollowed-out, bloated economy. The dollar becoming a normal currency can only help the US fix that problem.
So now NATO lost the #1 reason for its existence because the dollar won't be going back to what it was and there is no military means of making that happen. As a result, now it is just a money black hole that will suck away the American budget while the European countries benefit. It is much better for the US to dump NATO on Europe and keep its money and spend it where it sorely needs to spend it.
Therefore Trump wants to get out of NATO. Even the prominent neocon Republican senators want to get out of NATO.
Because it became a pointless burden on America.
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