Years of overspending, mostly from 1983 onward, and the inevitable problem with repaying a debt that ever gains interest, have got us into a pickle. But we can put everything right, even at this last moment. And the main reason is because all countries make mistakes, so if we stop doing stupid things we can recover. Maybe people will list stupid things we do and good things we could do. If we stop enough stupid things and do enough good things we will come out OK. I need suggestions and criticism because I'm not an economist.
Stupid thing: We are constantly at war. Stupid thing: We stopped making things and started buying them from other countries, so money leaves this country, and goes to other countries. And the people who used to make things have in many cases to go into non productive work which is less satisfying and usually doesn't bring money into the country. Constant turmoil as long-established companies close means the next generation has no known future, and despair becomes more prevalent. Planning for the future becomes difficult and more people won't commit to having children.
The best way to avoid economic malaise is to avoid getting into that situation in the first place, to try to think ahead about what could happen. The majority of people, however, are stupid and do not think ahead. All too often politicians and economic-policy makers only react after the problem has become obvious and apparent. So the government response is a knee-jerk reaction to a problem that already exists. The American public was warned about the National Debt and trade deficits for decades, but there were many people who thought it didn't matter and even argued for why it didn't matter. It is a common psychological mentality to have during the "bubble" stage of the economy, when everything seems to be doing good, and the very thing that is ultimately going to end up dooming you seems to be thing that is providing immediate economic prosperity. Excessive low-skill immigration is an issue too, but many progressives and Left-leaning people want to stick their head in the sand and refuse to think about that. (hurts wages for less skilled lower income people, and results in overcrowding in big city areas, creating shortages of affordable housing and driving up housing prices, not to mention higher rates of crime and corruption that bring huge less visible costs to society)
Basically we need to make our own economy more efficient instead of relying on restraints for everyone else's economies. The reason is we are now in an information age, and the truth is getting out. We need to move ahead and be genuinely helpful instead of tricking everyone else. A happy world is within our reach.
The reason we are not competitive and need to 'arm-twist' abroad is because many of the very rich are making money off margins that push up prices of labor and manufacturing at home. Our labor rates are high because healthcare in the US costs overall twice as much as a percentage of GDP as in comparable countries. And then there's the ludicrous military expenditure which does not bring any protection or safety, just the opposite in fact. It's an expense we, with an ocean on each side and friendly nations north and south, do not need. We just need to stay friendly with the nations to the north and the south. We have to improve our own efficiency because right now the rest of the World is getting it's economic freedom (see for example russia-africa summit 2023)
I'm not sure that's true. I don't think the U.S. can or should have to compete with other countries in certain ways. For example, many other poorer countries have much lower wages, lack of labor or environmental protections, and many other things that probably most Americans would never be willing to accept. Even many of the things I think should be eliminated in the U.S. to make business more efficient and brings costs down, I do not envision that happening any time soon, the political will is not going to exist for that to happen. I do know that lots of Neoliberals advocated bringing in low wage immigrants into the U.S. with the idea that the U.S. needed them to allow its industries to be able to compete with all the low cost labor in the rest of the world, but I think that was a race to the bottom. Perhaps free trade zones in the world should be confined to groups of countries that have similar standards of living.
I did argue that very point some years back with a Thatcher supporting neoliberal who said 'the workers will have to readjust their expectations and to live on a competitive pay rate. A lot of the public believed that hogwash in the same way they believe anything a politician says. I did the arithmetic and pointed out if a British worker in the area we were in was paid the same as an East Asian worker then they could pay the rent for a one bedroom no bathroom apartment with nothing for food, transport, or heating. They would not be able to pay the whole rent and that would upset the landlord and they would be evicted and the landlords would lose income and then there would be a big problem because so much of the UK economy is built on buy to rent, House prices would go down a lot and the middle class in England has most of their wealth in their houses so those would devalue and the feeling of satisfaction due to owning a house, which although small is worth half a million dollars, that satisfaction would be lost and 80% of the population would want that Neoliberal government gone. Instead the country has been keeping the economy together by growing debt, and selling off everything they can. A slower decline but still all downhill, and definitely not the answer.
I think the Germans had the right idea to up skill their workers and supply better equipment so the work they did was worth a lot more money. That certainly worked because for many years if you looked at the Current Account Balances you would have seen Germany at the top pretty much every year, and the US and Britain at the bottom. They had got it right, until someone blew up the Nordstream pipeline.
Just to clarify, I don't think Thatcher ever wanted or expected the British workers to have to directly compete with Third World countries. As evidence, she warned that immigration would result in unemployment. I agree debt is not the answer, but there appears to be plenty of Neoliberals and those on the Left who can't see anything wrong with it, and seem to be of the mentality it is the answer. To a conservative, it is totally obvious it is not the answer, but we have to realize there are others of other political persuasions who see things totally differently.
Just some thoughts... After WWII, America owned the world. We were the only industrialized country that came out intact. If you wanted to buy a bus.. you had to buy American. A plane? American... cars... appliances.. quality furniture... American was your only choice. I remember when Japanese goods were considered junk. (How things have changed). We were rich and controlled the world's markets. So we could afford higher wages, more benefits and a lot more. We got spoiled. Now we face competition from quality goods from all over the world made by talented folks that accept lower wages and fewer benefits. Unlike us, the rest of the world never got spoiled. I recently bought some fantastic patio furniture made in Viet Nam. Its a higher quality at a better price than anything I could find American made. It's not the 1950's anymore. We'll have to unlearn a lot... to compete. We got spoiled by a set of circumstances that no longer exist.
The US is run by the people who already have the most money, and is therefore run by people who think several decades behind the reality we are in today.
