While the war in Ukraine rages, America’s domestic challenges continue to pile up

Russia invaded Ukraine on Feb. 24. and after nearly a month of bloodshed, the Ukraine people have valiantly held off what most consider a superior military force. Even threats of a tactical nuclear weapon have surfaced. Nonetheless, the casualties have been significant, particularly among civilians, with such heinous acts of war uniformly condemned and criticized. 

Much of the news in our nation has been focused on this war. And rightly so. Yet, several noteworthy domestic issues have flown under the radar, or not received the attention that they normally would have received under a more placid world situation. Lawmakers who ignore these developments do so at our nation’s peril. 

The pandemic:

On Feb. 25, the Centers for Disease Control and Prevention (CDC) revised their face mask guidelines, creating a three-tier risk assessment (low, medium and high), based on three factors within a county: hospitalizations and hospital bed availability, number of new cases, and new case rate per capita. This has shifted the burden of face mask policies to local communities, moving away from a one-size-fits-all policy. It is also an indicator that the pandemic phase of COVID-19 is transitioning to the endemic phase. This places more responsibility on individuals to protect themselves if they are part of vulnerable groups, such as the immunocompromised or the elderly. With the number of new cases rising in Europe with the BA.2 variant, is a similar uptick imminent in the U.S.? 

Gasoline prices and inflation:

Gasoline prices have surged to record levels over the past three weeks, topping $4 per gallon across the nation. The last time that gasoline prices reached these levels was back in 2011, which also coincided with political turmoil in the Middle East. Given that every facet of our nation’s supply chain and transportation infrastructure uses fuel, this has put upward pressure on prices, pushing inflation up to levels not seen in over 40 years. Given that the primary weapon available to the Federal Reserve for combating inflation is raising short-term interest rates, which they just used by raising the Federal Fund rate by 0.25 percent, this could also put headwinds on economic growth, creating the risk of a recession just as the nation enters the midterm election season.

National debt: 

The United States’ national debt recently crossed $30 trillion. Even with historically low-interest rates over the past decade, interest expense on this debt is on track to exceed $600 billion in fiscal year 2022, although some of this is intragovernmental holdings. For example, debt owned by the Social Security Trust Fund does not require direct payouts. Increasing the Federal Fund rate means that new and rolled over debt will require higher interest rate payments, pushing interest expenses to levels that move it along a dangerous path to the highest category of federal expenditure. 

As war continues to be waged in Ukraine, there are many events and issues that are percolating here in the United States. Although some would like to believe that the COVID-19 pandemic is over, even if we may be transitioning to the endemic phase, people will continue to get infected and deaths among the most vulnerable will occur. This further highlights the need for safe and effective treatments and therapeutics, something that the pharmaceutical industry is aggressively pursuing.

Data indicates that gasoline prices began climbing long before Russia invaded the Ukraine. The war is a convenient explanation, and is certainly exacerbating the situation, but it is not the root cause of the spike in prices. 

The same can be said about inflation, which also began to increase in mid-2021, long before the Russian invasion. 

Given that goods and services are delivered within a global supply chain, the economic impact of the war domestically is significant. Moreover, with China not explicitly supporting the Russian invasion, but showing support for Russia in other ways, the delicate balance of managing multiple players in a complex game of diplomacy, economic sanctions and outright war means that the likely outcome from all this is fraught with risk and is highly unpredictability. 

Americans are paying more at the pump and in the grocery store. Will peace in Europe reverse these trends? Most likely not. Indeed, how long these trends continue is anyone’s guess.

What we do know is that the domestic economic risks over the next year are significant, and that the war in Ukraine are only making it worse.

Perhaps this moment can be seized by lawmakers on both sides of the aisle to put aside petty squabbles and come together, just as they did in applauding Ukraine President Volodymyr Zelensky during his moving address to Congress. Indeed, peace in Ukraine is not only critical to Ukrainians, but to Americans and for that matter, everyone in the world, whether they realize it or not.

Sheldon H. Jacobson, Ph.D., is a founder professor of Computer Science at the University of Illinois at Urbana-Champaign. He applies his expertise in data-driven risk-based decision-making to evaluate and inform public policy.