The US is squandering its two most important privileges

Vox

28-05-2025

is an editorial director at Vox overseeing the climate, tech, and world teams, and is the editor of Vox's Future Perfect section. He worked at Time magazine for 15 years as a foreign correspondent in Asia, a climate writer, and an international editor, and he wrote a book on existential risk.
In 1965, then-French finance minister Valéry Giscard d'Estaing came up with the mot juste for describing the way that the supremacy of the dollar provided the foundation for the financial supremacy of the US. The fact the dollar was so dominant in international transactions gave the US, d'Estaing said, an 'exorbitant privilege.' Because every country needed dollars to settle trade and backstop their own currencies, foreign countries had to buy up US debt, which in turn meant that the US paid less to borrow money and was able to run up trade and budget deficits without suffering the usual pain. The exorbitant privilege of the dollar was that the US would be able to live beyond its means.
Future Perfect
Explore the big, complicated problems the world faces and the most efficient ways to solve them. Sent twice a week. Email (required)
Sign Up
By submitting your email, you agree to our Terms and Privacy Notice . This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
It's always been an open question as to how long that privilege would last, but President Donald Trump's harsh tariff policies, paired with a budget bill that right now would add trillions to the budget deficit, might just be enough to finally dislodge the dollar. Annual federal deficits are already running at 6 percent of GDP, while interest rates on 10-year US Treasuries have more than doubled to around 4.5 percent over the past few years, increasing the cost of interest payments on the debt. As of the last quarter of 2024, 58 percent of global reserves were in dollars, down from 71 percent in the first quarter of 1999. The dollar may remain king, if only because there seems to be no real alternative, but thanks to the US's own actions, the exorbitance of its privilege is already eroding — and with it, America's ability to compensate for its fiscal fecklessness.
Related Trump figured out how to hit Harvard where it really hurts
But the dollar isn't the only privilege the US enjoys. Since the postwar era, America's best universities have led the world. Harvard, Princeton, the Massachusetts Institute of Technology, CalTech — these elite universities are the foundation of the American scientific supremacy that has in turn fueled decades of economic growth. But also, by virtue of their unparalleled ability to attract the best minds from around the world, these schools have given the US the educational privilege of being the magnet of global academic excellence. In the same way that the dollar's dominance has allowed the US to live beyond its means, the dominance of elite universities has compensated for the fact that the US has, at best, a mediocre K–12 educational system.
And now that privilege is under attack by the Trump administration. Cutting off federal funding for universities like Columbia and Princeton and eviscerating agencies like the National Institutes of Health and the National Science Foundation were bad enough — but the administration's recent move to bar international students from Harvard would be a death blow, especially if it spread to other top schools.
The ability to attract the best of the best, especially in the sciences, is what makes Harvard Harvard, which in turn has helped make the United States the United States. Just as losing the privilege of the dollar would force the US to finally pay for years of fiscal mismanagement, losing the privilege of these top universities would force the country to pay for decades of educational failure.
American science runs on foreign talent
As Vox contributor Kevin Carey wrote this week, foreign students are a major source of financial support for US colleges and universities, many of which would struggle to survive should those students disappear. But the financial picture actually understates just how much US science depends on foreign talent and, in turn, depends on top universities like Harvard to bring in top students and professors.
An astounding 70 percent of grad students in the US in electrical engineering and 63 percent in computer science — probably the two disciplines most important to winning the future — are foreign-born. Nineteen percent of the overall STEM workforce in the US is foreign-born; focus just on the PhD-level workforce, and that number rises to 43 percent. Since 1901, just about half of all physics, chemistry, and medicine Nobel Prizes have gone to Americans, and about a third of those winners were foreign-born, a figure that has risen in recent decades. It's really not too much to suggest that if all foreign scientists and science students were deported tomorrow, US science would grind to a halt.
Could American-born students step into that gap? Absolutely not. That's because as elite as America's top universities are, the country's K–12 education system has been anything but.
Every three years, the Program for International Student Assessment (PISA) is given to a representative sample of 15-year-old students in over 80 countries. It's the best existing test for determining how a country's students compare in mathematics, reading, and science to their international peers.
In the most recent PISA tests, taken in 2022, US students scored below the average for OECD or developed countries in math; on reading and science, they were just slightly above average. And while a lot of attention has been rightly paid to learning loss since the pandemic — one report from fall 2024 estimated that the average US student is less than halfway to a full academic recovery — American students have lagged behind their international peers since long before then. Other wealthy nations, from East Asian countries to some small European ones, regularly outpace American peers in math by the equivalent of one full academic year.
To be clear, this picture isn't totally catastrophic. It's fine — American students perform around the middle compared to their international peers. But just fine won't make you the world's undisputed scientific leader. And fine is a long way from what the US once was.
America was a pioneer in universal education, and it did the same in college education through the postwar GI Bill, which opened up college education to the masses. By 1950, 34 percent of US adults aged 25 or older had completed high school or more, compared to 14 percent in the UK and 11 percent in France. When NASA engineers were putting people on the moon in the 1960s, the US had perhaps the world's most educated workforce to draw from.
Since then, much of the rest of the world has long since caught up with the US on educational attainment, and a number of countries have surpassed it. But thanks in large part to the privilege that is elite universities like Harvard or the University of California, and their ability to recruit the best, no country has caught up to the US in sheer scientific brainpower. Take away our foreign talent, however, and US science would look more like its K–12 performance — merely fine.
Life after Harvard
It seems increasingly apparent that the Trump administration wants to make an example of Harvard, proving its own dominance by breaking a 388-year-old institution with strong ties to American power and influence. On Tuesday, the New York Times reported that the administration planned to cancel all remaining federal contracts with Harvard, while Trump himself mused on redirecting Harvard's $3 billion in grants to trade schools.
Grants and contracts are vital, but they can be restored, just as faith in the US dollar might be restored by a saner trade policy and a tighter budget. But if the Trump administration chooses to make the US fundamentally hostile to foreign students and scientific talent, there may be no coming back. Politico reported this week that the administration is weighing requiring all foreign students applying to study in the US to undergo social media vetting. With universities around the world now competing to make themselves alternatives to the US, what star student from Japan or South Korea or Finland would choose to put their future in the hands of the Trump administration, when they could go anywhere else they wanted?
The US once achieved scientific leadership because it educated its own citizens better and longer than any other country. Those days are long past, but the US managed to keep its pole position, and all that came with it, because it supported and funded what were far and away the best universities in the world. That was our privilege, as much as the dollar was. And now we seem prepared to destroy both.
Should that come to pass, we'll see just how little is left.
A version of this story originally appeared in the Future Perfect newsletter. Sign up here!