This month, an NBC/Wall Street Journal survey found that while sixty one per cent of us say we want a balanced budget amendment to the Constitution, most of us change our minds once we're told of the personal sacrifices that it would entail. It drops to just twenty seven per cent who still wish to pay the piper. Ever since Lyndon Johnson's "guns and butter " politics, our leaders have competed to shield us from reality. Nixon cancelled the draft so now only professional soldiers are sent to war--over and over again--while the rest of us are at liberty to pretend the nation is at peace. Congress has repeatedly voted to lower taxes and raise the debt ceiling rather than reconcile our revenues with our expenditures. And leaders who should know better countenance Sophistry in assessing the toll we are exacting upon our environment.
This week President Obama addressed the American budget deficit. I can not fault him for his partisan approach--he was fighting fire with fire. But he needs to mount the bully pulpit and educate the public. I hope that a detailed proposal along with a series of dutch uncle speeches will follow. Obama's tendency to entrust Congressional horse trading will simply not suffice.
"Bully Pulpit", by the way, is a term coined by Theodore Roosevelt. It is well to remember that Roosevelt, a Republican when he was president, was firmly committed to free enterprise. However, he was a trust-buster and the author of the "Square Deal", (precursor of FDR's "New Deal"), which sought to protect workers and to regulate capitalism's excesses.
Official Portrait of President Theodore Roosevelt by John Singer Sargent; 1903. This painting hangs in the White House. The story goes that Sargent and Roosevelt, as they traipsed from room to room looking for the right place and pose, became impatient with each other. While climbing the stairs, the subject gripped the newel post and turned on the painter to express his pique, and Sargent had his pose. Click on the picture for a closer look.
4 comments:
The overall picture that emerges from various articles on USA economy is as follows:
1. Capitalism collapsed in 1929 (Communism - twenty years ago).
2. Within the next five years USA economy is expected to 'go kaput'; the dollar will cease to be the reserve currency.
3. Only very drastic economic measures could possibly prevent the above mentioned economic collapse.
However, americans don't seem to realize that, as they expect their political parties to reach some sort of compromise regarding the measures to be taken. Any such compromise will be too little and too late.
Well, the situation might not be as bad as it sounds. Just think of Mubarak - a long time ally of american presidents - facing the hanging rope.
Duta: Not sure why you think capitalism collapsed; it seems to be alive and well, and has vanquished socialism.
The choice of the reserve currency is a fascinating subject and I intend to write about it eventually. Its choice is a confluence of economic size to absorb foreign investments, monetary policy to make valuation predictable, political stability to guard property rights, independence of the country's courts to settle claims of both foreign and domestic plaintiffs fairly, and military might to defend itself and its interests. So far, no other country is in the running, which may be a very sad commentary on the state of our world.
I didn't say that I personally think so; it's what certain economists claim, and I tend to believe there might be something about it.
Since 1929 , America has been developing all kinds of economic bubbles, call it capitalism or whatever,(with such a deficit it doesn't matter what you call it; it may be alive but it's not well.), and it's all about to explode in the following years.
As for the reserve currency, it is believed that it will probably be determined by China, Russia, India, Brasil.
The present monetary policy of the Federal Reserve is ..to non-stop print money which has nothing to do with real economy. I don't foresee political/social stability in America during the next years.
Alas, you raise some troubling points. And each of the four countries you mentioned has great power and wealth. But they also contain the seeds of their own instability, with millions of citizens who haven't benefited from their recent economic growth one iota. Russia and China, in particular, are still essentially totalitarian. China manipulates its currency and Russia confiscates assets at will. I personally doubt the rest of the world would trust either of them with its savings.
Meanwhile, the U.S. is in a transitional period in which the electorate is learning about debt and deficits. We're hollering at each other far too much, but at least we're on message. Once a plan to control entitlements is put into place, look for a big rally in financial markets worldwide.
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