What Others Think of Our Economy

One of the best article’s I read on our economy, and it came from a Canadian.

Here, are some of the major excerpts from the article published by UPI Asia:

Prescription for the battered U.S. economy

By Hari Sud
Column: Abroad View
Published: January 23, 2009

Toronto, ON, Canada, — The U.S. economy has spun out of control. The “band-aid” measures adopted in the past three months by handing over to banks half of the US$700 billion in aid voted in September, another US$18 billion to carmakers and now a $1 trillion dollar expenditure proposed by new U.S. President Barack Obama is headed for naught.

Some surefire cures for today’s economic ills are:

  • Cut back on oil imports.
  • Bring back manufacturing to the United States from China.
  • Cut wages and salaries by as much as 20 percent with tax holidays for lower income groups.
  • Reduce the size of government to cut expenses.
  • Cut military adventurism abroad.

Although the United States is aware of its illness, it has trouble facing it. If an urgent and concerted effort is not made to address it, the future is insecure given its US$12 trillion government debt and several more trillion dollars in state, personal and business debt. And if the United States falters, the rest of the world will follow suit.

In the last 40 years, the United States has developed an unhealthy appetite for credit. The U.S. government, its citizens and its businesses live beyond their means. U.S. consumers have US$850 billion in credit card debt alone, and carry $2.7 trillion in other consumer debt. The latter figure does not include mortgages, which total $8 trillion. This is too large a burden for any nation to carry. To get out of this mess the United States has to start living within its means. But where does it begin?

Oil imports cost the country an average US$700 billion annually. This needless drain of cash occurs due to big consumer appetites for oversized vehicles, transporting goods long distances, traveling too much on minor excuses and generally living a high life.

Manufacturing lost to China under the pretext of globalization and price competitiveness due to cheap Chinese labor has to be brought back to the United States.

Chinese manufactured goods exported to the United States rose to US$340 billion in 2008. That is 8 percent higher than the year before, and the trend is likely to continue. U.S. exports to China for the same period were only $66 billion. This gives the U.S. a current account deficit of $274 billion with China alone. After oil, this is the second biggest drain on the U.S. economy – and it must stop.

A wage cut for white-collar workers and those who work on commissions, contracts and fat bonuses should be undertaken. The millions of dollars in commissions paid to chief executive officers of investment houses should be curtailed, along with those for workers in other sectors like information technology and engineering, where high wages have resulted in jobs outsourced to India.

This year’s deficit – expenditures minus income – is about US$385 billion and likely to rise. Gone are the days when former U.S. President Bill Clinton handed over the presidency to his successor, former President George W. Bush, with a $250 billion surplus. Something has gone wrong. The surplus has been squandered in providing tax cuts to the wealthy and fighting an unpleasant war in Iraq.

The United States also suffers from manipulative political lobbying. Close to US$4 billion is spent on politicians and officials to get legislation passed. This money corrupts politicians and officials. The country has to learn to run its democracy without lobbying. Legislatures have to vote on their integrity and convictions.

If Obama succeeds in force-feeding a bitter pill to the American people and politicians, the country may be on a stable path to recovery. Europe, which has similar problems to those faced by the United States, is going to have to pursue a similar remedy.


5 Responses to “What Others Think of Our Economy”

  1. January 23, 2009 at 11:59 PM

    Very intersting article … most specially for equating our military follies into the package … thanks a lot …

  2. 2 Tom Awtry
    January 24, 2009 at 12:14 AM

    Thanks much for the comment, but I have to admit the “Truth Hurts Sometimes.” A finally point; many times academics have the best solutions, but put people dislike implementing them, I hope the academics are correct on the issue of the economy?

  3. January 24, 2009 at 12:22 AM

    But whether being them right or wrong … it’s our task to stand united and once and for all take a holiday from our issue driven society … for what I understand, there’s one issue that really matters right now … our economy … all other issues must kept in a safe vault for future haranguing …

  4. 4 Tom Awtry
    January 24, 2009 at 12:33 AM

    Correct, and brings the troops back would result in a tremendous saving on the outlay of cash we keep pouring into these countries, achieving minimum results.

  5. January 24, 2009 at 1:03 AM

    Yeah … like I’ve always said … Afghanistan to the Afghans … Iraq to the Iraqis … Cuba to the Cubans … Formosa to the Chinese and so forth … boy we would save a lot of money if we stopped all this state-terrorism we call foreign policies … in fact, I think this is the right time for the Argentines to finally expel those British invaders from the Malvinas …

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