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The Big List of Reasons for America’s Fall – With Rebuttals
by the editor of Fabius Maximuws web site
Charles Sulka Commentary
(09-26-2016 16:14 -0500)
This post is a brief commentary on several of America’s pressing economic and political issues. These nine points hardly constitute a full list of what has gone wrong — and what needs to be fixed — in America … but they are a good place to start.
It appears the writer’s purpose is to minimize, obfuscate, and confuse the issues. Because the writer denies the reality of these problems, he offers rebuttals but not solutions. This article then is little more than an exercise in denying reality. Still, there is a usefulness in an article of this type: an examination of the writer’s views will help us in assessing our own view of reality.
The links lead the reader to more detailed exploration of the issues — but not to a comprehensive or balanced examination of the issues.
The essay is superficial and pretentious. More often than not, the logic is unsound. One can only conclude that the writer strives to be a professional propagandist — maybe an advertising copy writer or a political speech-writer — with this essay being a practice exercise. One might accuse the writer of being a dilettante concerned not with enlightening the reader, but with convincing others of his preconceived opinions — and not very well thought out opinions, at that. The writer seems to have a natural dislike of contrarians, those who question the prevailing views of the ‘experts’ (those he regards as experts, anyway) on the issues. He is especially disdainful of populist sentiments.
In the introduction, the writer scoffs at what he describes as ‘doomsayer’ messages, saying that “the content is almost entirely exaggerated or wrong.” This dismissive assessment is indicative of the writer’s pride and arrogance, traits that are unfortunate in a man of letters. Such traits are not conducive to serious analysis. Such traits diminish both the writer and his work.
Still, the writer is correct when he suggests that we must carefully examine the claims of the doomsayers so that we can chart a course for a better future and an American renewal. The issues require sober, analytical, objective examination, not a hasty dispatch based on one or two articles that agree with what one has been thinking all along. The future of America, and, indeed, the world, depends upon our arriving at an understanding of these issues, and taking appropriate measures.
The Fabius Maximus article in text format follows the comments. The original article should be viewed in the HTML at the publisher’s web site: https://fabiusmaximus.com/2016/09/06/untenable-america-98846/
Some comments, point-by-point:
(1) THE RISING U.S. PUBLIC DEBT WILL CRUSH THE U.S. DOLLAR
On this issue, the writer’s logic is sound. The issue is far more complicated than most economists let on. There are many unforeseen factors that could mitigate the damage from rising public debt. Moreover, the solution is as simple as it is obvious: reverse the irresponsible cuts to tax rates and change the tax policies that have resulted in the budgetary shortfalls. The writer’s conclusion is reasonable. The prescription for saving the American economy: tax and spend — tax the rich and spend wisely.
Talk of raising taxes for anyone other than the rich is silly. The rich have amassed all of the nation’s wealth; we need to get it back to put it to work in the productive economy. Why waste time talking about placing even greater burdens on the backs of the growing number of poor in America (which now includes the former middle class?) The poor don’t have any money. As my grandmother used to say, you can’t get blood from a turnip.
And *everybody* agrees that we need to spend taxpayers’ money wisely. This means drastic cuts for the military-industrial-intelligence complex and improvements to social services and renewal of America’s crumbling infrastructure.
(2) THE U.S. IS NOT COMPETITIVE
The discussion here ranges from highly suspect to totally off-base. The writer offers no convincing evidence to refute the growing realization that America’s competitiveness is lagging.
The writer cites a high rating on ‘ease of doing business’ as proof that the U.S. is competitive. Presumably, ‘ease of doing business’ refers to the deregulated, no-holds-barred business climate resultant of neoconservative and libertarian politics. ‘Ease of doing business’ is a vague concept which does not necessarily have anything to do with competitiveness. In reality, the U.S. business environment is anti-competitive, rife with consolidations, monopolization and acquisitions by foreign interests. With regard to support and encouragement for new business, the U.S. ranks near the bottom of the list of developed nations in terms of entrepreneurial opportunity.
The plain truth is, the U.S. produces almost nothing. This nation imports virtually everything — certainly all consumer products. The writer appears to be in denial about this. America is not competitive in the global market — nor even the American market, for that matter. When was the last time you saw the “Made in America” label on a product?
The writer claims that America’s rising Gross Domestic Product (GDP) is proof that the U.S. is still competitive. The article includes two charts that supposedly support the writer’s contention that GDP is rising. Neither chart is very convincing. The first chart shows the GDP flat-lining, and the second shows less than 2% (cumulative!) increase in GDP growth rate over the past six years. And this growth figure is highly suspect.
The writer’s assertion that biotech, software, and internet are leading U.S. growth industries is questionable. The expectation that these technology-oriented fields will save the nation’s bacon, so to speak, is probably unrealistic. Let us examine these three issues . . . .
* BIOTECH: In all probability biotech will die a slow death. GMO agriculture will be killed off by world-wide public opposition to ‘Frankenfoods’ and concerns about poisoning the earth. GMO crops require massive amounts of chemical pesticides; GMO crops are not suited to sustainable agriculture. There is a growing recognition of the importance of living in balance with nature. GMO foods and the resultant environmental degradation have no place in a world dedicated to responsible stewardship of God’s creation. Hopefully public opposition to genetic engineering will put an end to this nonsense before the world suffers plagues and famines caused by man’s reckless dabbling in areas of science where he has no business.
A recent development: Monsanto, America’s largest producer of genetically-engineered agricultural products, was just purchased by a foreign firm. So much for America’s competitiveness in the biotech industry.
* SOFTWARE: With regard to exports of software, the end of software as a growth industry could be fast approaching, as evidenced by the growth of open-source software and the major software firms’ (including Microsoft’s) recent changes in business philosophy, products, and services. Too many firms, like Apple, the darling of the tech industry, may ostensibly be American firms, but in reality they manufacture all of their products overseas, and through creative accounting (financial manipulations) end up paying little or no taxes (anywhere.)
* INTERNET: As for the ‘internet’ it is not clear what the author is referring to. No internet hardware is made in America, and the software that facilitates the internet is open source (free). Furthermore, it is deceptive if the figures include the cost to consumers of overpriced internet service. America lags far behind the rest of the developed world in availability of affordable high-speed internet service. Might the writer be referring to web hosting? Web hosting services are moving out of the United States to other less restrictive countries to distance themselves from America’s all-intrusive national security establishment and lack of protections for personal privacy. It is nonsense to say America is competitive in ‘internet’. America’s putative leadership position in the world wide web could be short-lived, especially in today’s volatile business environment.
An update: The day after I wrote that the U.S. growth in ‘internet’ might be short-lived, I read that Hewlett Packard Enterprise (HPE) was just sold to a British firm. The U.S. is now even *less* competitive, to the tune of some $4.5 BILLION per year lower GDP, a loss directly attributable to globalization and free trade.
(3) THE U.S. HAS A WEAK EDUCATION SYSTEM
Cherry-picking statistics won’t change the truth. Today America’s high-school graduates can barely read and write (or formulate a sentence, think logically, or express ideas meaningfully.) The curricula have been dumbed-down to such an extent that high school graduates today read at what used to be a 6th grade level (and they think at an even lower level, if they think at all.) Let’s face some cold, hard facts here: U.S. high-school graduates are the worst prepared of all the developed nations. Comprehension of math is the lowest of any nation except Namibia in darkest Africa, where the schools don’t even have electricity or running water (actually I think it is Nigeria, not Namibia, but you get the point.) Overall, the U.S. education system is in terrible shape, and it is being further undermined by the advent of ‘charter schools.’ Privatization distorts the whole process, leading to the destruction of public education in America. Things will probably get a lot worse before they get better.
(4) THE U.S. MIDDLE CLASS IS DYING
The writer’s logic is unfathomable here. The struggles of the middle class are well documented. The reality is:
WAGES: wages have been driven down to the level of 1974 and are stagnant at best …
SAVINGS: Working Americans have no savings; saving have all been used up …
HOME OWNERSHIP: home ownership is at the lowest level in a century, with a large proportion of young people forced to live with their parents as they cannot afford housing …
JOB SECURITY: the fear of losing one’s job is the greatest concern for the vast majority of working Americans …
PERSONAL DEBT: Americans are struggling under crushing usurious debt, having borrowed heavily in a desperate attempt to offset lost wages and the rising cost of living …
CONCERNS ABOUT THE FUTURE: Americans widely regard prospects for the future as bleak indeed …
The evidence that the American middle class is struggling, unable to keep its head above water, is overwhelming.
The writer claims that the plight of the middle class is exaggerated because America’s GDP is growing. As more than 90% of all economic gains go to the ruling elites, it is hard to see how a rising GDP benefits the middle class. The statistics used by the writer are misleading. Moreover, the writer’s logic, faulty as it is, is based on an increase in GDP which is primarily from the sale of natural resources — resources that are needed right here at home if we are to ever rebuild America’s industrial base. The statistics also reflect increases in markets where American industry is (or soon might be) losing ground. Foreign competition will put an end to America’s preeminence in these fields. High prices for American products cannot offset falling demand forever.
More and more economists are coming to the realization that GDP is a misleading, even meaningless, figure. The growth in GDP in this analysis is a reflection of America’s sale of its natural resources to countries with productive economies — America’s competitors — countries that actually make products. Growth from sales of natural resources is actually *counterproductive.* The American government and big business are short-changing the nation’s future for the sake of short-term profits. Ironically, these short-term profits are not shared by most of the American people … especially not the shrinking middle class.
Looking at this another way … The writer might be right when he says it is untrue that the U.S. middle class is dying. It would probably be closer to the truth to say that America’s middle class is dead and gone.
(5) WE CAN’T RAISE TAXES ON THE RICH
The writer’s logic is spot-on here. Of course we can enact responsible tax policies and reverse the unjust, irresponsible, even insane tax policies that have nearly bankrupt the nation. Tax rates for the wealthy need to be restored to responsible levels, the rates that were in place before the Clinton and Bush give-aways to the rich. It is probably not necessary to return to the high tax rates of years past, where maximum tax brackets reached 90%.
Not only must the effective rate of taxation be raised, the nature of income taxes needs to be re-examined. Taxing speculation (capital gains) at the same rate (or even lower rates) as honest income undermines the economy and enriches non-productive individuals (the investor class.) Speculation needs to be discouraged through high taxes on capital gains. A number of economists are calling for a financial transaction tax, a promising concept. Moreover, the effective tax rate needs to be raised by eliminating loop-holes and financial schemes that reduce the actual taxes (if any) paid by the rich to a fraction of the putative tax rate. Restoring responsible tax policies and making changes necessitated by the fast-paced manipulations of today’s financial market is simple in theory. However, progress will probably not be possible under the current political system, where our elected representatives are controlled by their puppet-masters in big business and high finance. But that is a separate issue.
The writer bases the assertion that raising taxes on the rich is doable on a re-examination of the ‘Laffer Curve’, probably the most damaging of the simple-minded Reagan-era economic concepts, central to supply-side economic theory. The Laffer Curve is the cornerstone of the Reaganites’ ‘voodoo economics.’ Sober thinking is required to refute the premise of the Laffer Curve and trickle-down economics. Supply-side economics is based on the proposition that reducing taxes for the rich is good for the economy and actually raises tax revenues because the rich will use their newfound wealth to start businesses which, in turn, create jobs and stimulate economic growth. This is bull____ (is a clever lie.) (The neocons may be evil greedy bastards, but they aren’t that stupid.)
Simple logic refutes the contention that slashing taxes for the rich will lead to prosperity. The market is of fixed size; the market for goods and services can only grow through population growth (which results in a greater number of consumers) else through increased earnings for the workers (the consumers then having more money to spend.) Different sectors of the market can shrink or grow relative to the overall market when consumer preferences change, and consumer credit can increase the size of the market (but only temporarily.) Overall, the market is relatively constant, directly related to the cumulative incomes of the workers. The market is not subject to growth from the mythical spate of new business start-ups — over 90% of which fail in the first five years, anyway. At best, the new businesses will simply take market share from existing businesses, although not necessarily in the same market sector. The market *could* grow if the new businesses paid significantly higher wages or employed large numbers of previously unemployed individuals, or put greater numbers of people to work generally. But history has shown that this does not happen. Instead, the investor class buys up existing businesses and through asset stripping, out-sourcing, and off-shoring manufacturing jobs, actually decrease both the number of Americans working and their disposable income.
The other way markets have been expanded, historically, is through exports. However, economic growth based on exports only works for a limited time, until the rest of the world catches up with the industrialized (exporting) nations. Most of the industrialized nations are approaching parity, and the poor nations are, well, too poor to buy the goods the manufacturing nations produce. The strategy the neocons have used to exploit the poor nations has been to pay off the corrupt politicians and the elites so that policies can be put into effect that will encumber those nations in usurious debt in exchange for consumer products.
The disastrous policy of so-called Free Trade was embraced by many because its advocates promised that burgeoning exports would result in economic growth … at a time when an economic miracle was desperately needed. The nation, and indeed the world, has reached the limits to growth. One doesn’t need to be an Einstein to see the fallacy inherent in the proposition of never-ending growth. The empty promises of Free Trade and deregulated capitalism have turned into a disaster for most of the people of the world (all but the 1%.) What we have is capital chasing its tail round and round the globe and labor being crushed, struggling in a ‘race to the bottom.’ Under the miracle of Free Trade, everyone loses.
Note that there is some confusion — quite deliberate on the part of economists — to conflate the stock market and financial services with the productive economy, that is, the market for goods and services. This is a deliberate attempt to confuse the public, some of whom have at least a passing familiarity with basic economic concepts. If economists are good at one thing, it is confusing great numbers of people. (This is not unintentional; it is a strategy for assuring job security in these uncertain times.) The numbers in the financial sector can, and do, grow exponentially. After all, the financial manipulators are playing with imaginary money (but the commissions and fees they extract are all too real.) At present the valuation of ‘derivatives’ — a form of worthless financial paper that allows bankers to gamble recklessly in totally unproductive activities — is many times the cumulative net worth of the entire planet. (!!!)
Economists use the deceptive term *wealth creation* to describe the escalating valuations in the financial sector. As if by magic, the financial sector creates ‘wealth’ out of thin air — not wealth for you and me, mind you — just for the elites. By this subterfuge the rich get richer and the poor get poorer. High-paid economists try to delude us, assuring us that as the numbers get bigger, we are all better off. Surely you have heard that “a rising tide raises all boats”, a platitude oft repeated by neocons. If only it were true.
All these glowing reports from economists are just more BS. Everyone is looking for some good news on the economic front. The press (and politicians) celebrate the assurances of the financial sector luminaries as signs of economic health. In actuality the ‘growth’ the economists brag about is a sign of a diseased economy, an economy rife with non-productive economic activity (speculation and price inflation.) This view of the economy has no basis in reality … it is, in fact, inverted. Fictitious rates of growth obscure the dismal reality of America’s failed economy.
In reality, reducing taxes for the rich is good for the rich, and nobody else. The evidence is overwhelming, and undisputable. The claim that the rich create jobs and stimulate the economy with their money is a myth. What really happens is that the rich use their undeserved wealth — plus as much as they can borrow at low interest rates, favorable rates not available to honest working people — for speculation and buying up the nation’s assets on the cheap. Then they sell these assets to foreigners at inflated prices, usually paying no taxes on the obscene profits. Expropriating the nation’s assets and selling them off is called ‘privatization.’ Like ‘austerity’ (starving the working class to death), privatization is central to neoconservative politics (neoliberal economics.) Privatization and austerity are diametrically opposed to everything America stands for — or should stand for, anyway. Privatization and austerity is what the elites refer to as the ‘Washington Consensus’; it is the basis for the New World Order that America would force upon the other nations of the world.
According to the writer, economists are now questioning the wisdom of reducing taxes for the rich. Economists are saying that the concept of tax cuts for the rich based on the hypothetical Laffer Curve needs to be re-examined. Some economists — the more thoughtful ones, anyway — are saying that the point at which tax increases depress business and restrict growth are far higher than previously stated. Here economists begrudgingly acknowledge that supply-side economics has been a failure. This is about as much of an admission of wrong-headed thinking as society ever gets from economists. And no economists will lose their jobs because of it.
Even in this admission — bold as it is for economists — they are probably understating the case. Is there ANY point at which tax breaks for the rich lead to economic growth? Probably not … America’s growth was highest when the top tax rate was 90%. It is quite possible that ALL the income from the richest 1% could be seized in confiscatory taxes with absolutely no harm to the economy. To the contrary, the nation would very likely prosper, being freed of the strangle-hold the wealthy have on the economy. Recovering the money that the 1% have expropriated and repatriating the nation’s assets — restitution being a Biblical concept — would be the place to start in rebuilding the nation’s crumbling economy.
What the economy needs is economic programs to support new business ventures, perhaps under the auspices of public banks, community investment programs, etc., plus protections against unfair foreign competition, plus significantly higher wages for ALL workers. Usury, speculation, and consolidations need to be outlawed (as clearly stated in the Bible.) Corporations need to be stripped of their unique status as ‘citizens’ without accountability to society. This would be a formula for *real* growth, benefitting everyone. Unfortunately, such thinking runs counter to today’s prevailing economic theories.
One-third of WalMart employees rely on food stamps for survival because their minimum-wage jobs put them below the poverty line. The low wages paid to the workers by America’s largest employer enables WalMart’s owners to make off with truly obscene profits. Make no mistake about what is happening here — this is an example of the American taxpayers subsidizing the profits of the ownership class. This might be thought of as REVERSE ROBIN HOOD ECONOMICS — robbing from the poor to give to the rich. This is the reality of neoliberal economics.
Maybe if economists had to live on the wages the nation’s largest employer (WalMart) pays its workers, economists would see things in a different light.
(6) AMERICA’S POOR JUST NEED MORE EDUCATION
The writer is correct in saying that more education alone will not solve the problems of America’s collapsing economy, but it is not clear that the writer understands that productivity is collapsing while the meaningless — even counter-productive — measures of economic ‘growth’ are rising. GDP is a meaningless (or at least misleading) figure. A thoughtful analysis reveals that the ever-expanding valuations in the ‘market’ and growth of GDP actually tend to reduce income and wealth for all but the investor class while diminishing the savings of honest working people. While better education for all is a worthy goal, the problems caused by what the writer hails as the Next Industrial Revolution cannot be solved by education alone. The Next Industrial Revolution concept is used to downplay concerns about the destructive forces of unregulated capitalism — social and economic changes that are all but unstoppable and (according to this viewpoint) will over time inure to the benefit of all mankind. There is a countervailing argument that the economy has reached certain limits. In this analysis, today’s economy is actually over-productive due to increased productivity and that some industries, such as steel production and international shipping are actually suffering from over-capacity. The over-productive economy and over-capacity issues need to be addressed. The will not go away and they cannot be ignored.
The old economic paradigms are inadequate. Mainstream economists — who earn a good living fidgeting with shopworn ideas — are only now recognizing that corporate capitalism with its simplistic market theories is collapsing, and leaving most of humanity to suffer. These failed economic theories are being increasingly made more complicated by economists … to conceal the fact that they are clueless. A responsible industrial policy is of the highest priority. Management of the new economy will take serious thought and hard work, and a new economic paradigm, not glib statements and assurances based on meaningless numbers and decrepit economic theories.
(7) AMERICA’S POOR AT RISK OF STARVATION!
The writer shows a total lack of concern for the well-being of his fellow man when he says that the poor must be getting enough to eat because they suffer from a high incidence of obesity. (One should also take into account the related medical problems caused by this epidemic of obesity.) The writer is twisting the facts to try to buttress his position. Americans in general (not just the poor) are suffering from widespread obesity. There are a number of reasons. The primary causes are (a) sedentary lifestyle and employment, and (b) poor diet. Today, Americans are eating chemical-laced processed foods (fattening and disease-producing concoctions developed by corporate food scientists) instead of real food. This is a direct result of the breakdown of traditional family values, which has as its cause the corporatists’ relentless assault on wages, which they cleverly disguise as ‘free market’ economics. The rich drive down wages while simultaneously raising housing costs and food prices. (And remarkably, the government does not include the cost of housing or food in its ‘cost of living index’ so that official government pronouncements conceal the reality of the people’s suffering by lying with statistics, as in George Orwell’s novel, “1984.”) Because the family cannot survive on a single wage-earner’s salary, homemakers have been forced to abandon their traditional roles to seek jobs outside of the home. As a result, Americans have shifted to diets of processed foods that do not require time-consuming preparation. Such foods are low in nutrients and high in calories. The toll on the nation, and especially children, from pre-packaged low-quality food, and a lack of suitable child-rearing (child care outside of the home, and television and video games) is incalculable.
There are many surveys — including a number which feature their findings in the easy-to-read (?) charts and graphs favored by the writer — which accurately portray the plight of the poor in America. Glib statements dismissing the struggles of the poor (and the shrinking middle class, most of whom do not eat well either), implying they are actually well off because they are fat … is propagandizing at its very worst. This sort of irresponsible writing does little to raise the level of awareness of the general population, and can only have a harmful influence on public policy. Such writing is nothing short of shameful.
(8) AMERICA’S MILITARY GROWS WEAKER
The writer raises some good points here. America’s military *IS* in decline in a number of ways. But the bigger issue here is how the American nation itself is in decline *because* of its military. The U.S. military (rather, the ‘Military-Industrial Complex’ that former President Eisenhower warned us about) could be the single greatest threat to the American nation. (Well, maybe after Wall Street ….)
The economy is suffocating under the weight of the bloated military budget. (Yet in a perverse way the excesses and abuses of Pentagon spending is just about the only growth industry in America.) Military expenditures are dragging down the rest of the economy through misguided spending priorities, not to mention the rampant waste, fraud, and abuse such as the trillions of dollars missing from the Pentagon’s coffers. The nation’s moral values are in the gutter because of the glorification of war … the murder of innocents, women, children, journalists, doctors, aid workers … not to mention torture. This perverse celebration of death and destruction has so infected the nation’s consciousness that everyone now lives in fear … fear of the criminals, who more often than not, are the police. No-one, at home or abroad, is safe from the American government’s disregard for human life. Just about anyone anywhere (even U.S. citizens here in the Land of the Free) can be targeted for imprisonment or assassination by the nation’s murderous security forces — or even the local police — in callous disregard of the safeguards of the U.S. Constitution. Sadly, the American people are mostly silent on the issue, making them complicit in the American government’s crimes against humanity.
The nation’s power and prestige in the world has been greatly diminished because of America’s gunboat diplomacy and heavy-handed measures, often brutal — and always illegal — measures that cause widespread suffering. Nobody likes a bully. Not just nations, but whole regions of the globe have been devastated by America’s illegal wars.
Not least, the rest of the world is angrily rejecting the strident corporatism and rampant corruption that has infected American politics, business, and economics. Around the globe, people are rising in opposition to governments subservient to America and the IMF, which are seen (quite accurately) as scheming to enslave the human race in a neo-feudal New World Order.
But to focus on the military ….
America’s massive, inefficient (and many regard as ineffective) military machine is a dinosaur, a throwback to an earlier time, a time of horrific and seemingly never-ending wars. A military establishment on this scale was never necessary or appropriate, and is particularly unsuited to dealing with the threats the nation faces today. Since the end of the Cold War, this nation has faced little danger from attack by a major power. At the same time, the military is useless in defending against imminent threats such as domestic terrorism and foreign insurgencies, natural disasters, global warming, religious fundamentalism, economic collapse, social upheaval, the corruption of the nation’s business leaders, the stupidity of its politicians, and the confusion of the masses (resultant of corporate propaganda, government disinformation, and nonsense spouted by the ‘experts’.) And even the nation’s military leaders recognize the danger from the ascendency of multi-national corporations — ‘people’, according to the U.S. Supreme Court, who make no secret of the fact that they regard themselves as not being constrained by the moral and ethical responsibilities of citizenship. Perhaps most importantly, the military itself represents an existential threat to the American people. Increasingly, the military is being integrated into the all-encompassing surveillance state and the shadow government. The American government today is a government out of control, a government that thinks of itself as above the law. But this government is well armed ….
In truth, the military is, to a large degree, a major *cause* of the nation’s problems, and a solution to none. This is not entirely true: the military does provide jobs for a large number of otherwise unemployable individuals, keeping the dispossessed off the streets. The simple fact is, military spending is the centerpiece of America’s misguided industrial policy. If the nation is to prosper, America needs a new — and very different — industrial policy. Surely America can offer the world more than death and destruction.
There is no justification for the expansive (and expensive) military to support a global empire. The days of the American ’empire’ are fast coming to an end, due to the spread of democracy (no thanks to America) and to the emergence of new economic paradigms (everywhere but here at home, sadly.)
Finally, in a global economy in which America is increasingly becoming irrelevant, it is questionable whether we need a military to serve in the traditional role of safeguarding American interests. American interests aren’t American any more. Multi-national corporations owe allegiance to no nation — and they work diligently to undermine good governance everywhere they operate. Why should American taxpayers foot the bill for protecting corporate ventures which extract huge profits while demanding subsidies and all too frequently pay no taxes? Why should American soldiers — or their so-called enemies, who, as often as not, are innocent civilians — sacrifice their lives for Walt Disney Enterprises, owned not by Americans but by the Japanese? (It’s true: Mickey Mouse, Donald Duck, and even Pocahontas — American icons that are indelibly etched into the minds of people everywhere in the world — were sold off to The Empire Of The Sun in the early days of globalization.) Why should American soldiers die to protect AT&T, Chrysler, Dow Chemicals, or Atlantic Richfield, all companies now owned by foreigners, including the Saudis, who, according to government officials, are responsible for widespread terrorist attacks on this nation? Either the government is lying (something many Americans suspect) or its policies are insane (the overwhelming majority of Americans think this to be the case.) Any way you look at it, it just doesn’t make sense.
It is probably safe to say that America’s military can be significantly reduced in terms of both money and manpower without in any way weakening America’s national defense. This is what is meant by spending wisely in item (1), above.
(9) THE U.S. ECONOMY IS UNSUSTAINABLE!
I wonder whether the writer even knows what this means. As a nation, we are doing just about everything wrong. The people know it, but are powerless to do anything about it in a political system subservient to big business, manipulated by foreign powers, and, thanks to the artifice of compound interest, forever indebted to parasites (the money lenders.) The American economy today is a house of cards. What will happen, eventually, is what happens at some point to all such structures: they collapse in on themselves, quickly, and without warning. Nothing will be left standing.
For this, maybe we should be thankful. The collapse of America’s parasitic financial system could turn out to be a blessing in disguise. At least we will have an opportunity to start over. Maybe this time we will do it right.
IN CONCLUSION
Two, maybe three right, and six or seven wrong (several of which are totally wrong.) There’s not a whole lot in this essay that is worth saving. The writer should throw most of this out and start over. Rather than addressing such a wide range of issues, it would probably be better to focus on one or two issues and examine them in depth.
An analyst must try to remain unbiased. Be objective. Search for articles that do not support preconceived opinions; nobody ever learned anything from those who agreed with them. Importantly, show those with different viewpoints the respect they deserve. They probably have a better understanding of the issues than the rest of us do.
Writing is serious business. Bad writing — shallow, hasty, reckless writing — only contributes to the confusion on critical issues. A lack of understanding of the issues, in turn, leads to bad public policy. Bad public policy impacts peoples’ lives adversely. The irresponsible use of words leads to immense suffering by men and women all over the world.
If you think I am a demanding critic, just wait till Judgment Day. On Judgment Day we will see ourselves through the eyes of others, as The Lord see us, without the blinders. It will be especially painful to realize that pride — doggedly advocating poorly thought out positions on important issues — contributed to the confusion in the mind of the public, and that the resultant bad policy decisions caused pain and suffering for so many. This realization will cause the writer anguish beyond measure (‘wailing and gnashing of teeth’, to use a Biblical turn of phrase.) The damage that has been done by their careless use of language might even cause some writers to abandon hope, to condemn themselves to an eternity apart from God’s love, rejecting God’s mercy out of shame, a shame that is simply too much to bear. The stakes are high indeed. Think before you write.
Those who endeavor to make writing their life’s work must never forget that words have power. Words can change the course of world events. Words can change history; wield your words responsibly.
———-
A full list of reasons for America’s fall – with rebuttals
Summary: Here is a compendium of gloomy news about America, the news that drives political campaigns, fear-mongering .-eds, and advertisements for guns and gold. These stories cloud our minds with misinformation and dampen our spirits. Why are they taken seriously by so many people? Debunkings like this are the only antidote. Pass it on!
America at the end
Continuing our series about doomster forecasts, today’s post examines an unusually detailed prediction of doom for America. Like most doomster writing, the content is almost entirely exaggerated or wrong, but it shows us people’s fears and ignorance — both largely fed by propaganda. The author’s key points are given in quotes.
“The US Position is Untenable”
By Karsten Riise (no details given) at Martin van Creveld’s website.
(1) The US public debt
“The CBO analysis shows that Federal debt is on path to increase from 75% of GDP to 146% of GDP in 2046.”
Riise starts with the usual doomster favorite (as it has been since the New Deal): the US fiscal deficit. The wolf will always be at the door in 30 years! This is from the CBO’s 2016 Long-Term Budget Outlet. Also see the CBO’s slide deck.
Federal spending, revenue, and debt
These long-term predictions are useful planning tools, but range from unreliable to quite wrong. To treat them as indicators of certain doom is absurd. The many variables create a wide range of possible futures. In brief, the US government’s liabilities are among the easiest solved of America’s major problems (details here).
The government can change policies. Small changes can have large effects for 30 years such as increased taxes and reduced military spending (need we spend more than our rivals and foes combined?).
One of the largest drivers is rising interest rates. The CBO’s economists assume rates will rise, as they have incorrectly assumed they would since the recovery began. Perhaps their forecast will prove correct during the next decade, or perhaps secular stagnation and low rates will continue.
The other large driver is rising health care costs. This is among the easiest solved of America’s major problems, as our peers have built and tested many ways to provide equivalent levels of care at half or one-third the cost (details here). The transition will be painful, but at least we know the way. If only our other problems had known fixes!
“If something cannot go on forever, it will stop.”
— “Problems and Not-Problems of the American Economy” by Herbert Stein (economist) in The AEI Economist (of the American Enterprise Institute), June 1989. It is the key thing to know about the US health care system.
(2) The US is not competitive!
“The US economy is becoming less and less competitive.”
The author gives no definition or evidence for this bizarre statement, which is wrong in almost too many ways to list. First, look at growth in real GDP of the US vs. its peers. This graph from the OECD shows that the US (red) has grown slightly faster than the OECD average (black) since the crash, and is among the faster growing in the G-7 (light lines). Quite good for a large rich nation!
Real GDP of the US vs. the OECD average
Second, look at a narrower measure of competitiveness: exports — an American success story since 1972 (when Nixon took the US dollar off the gold standard, reducing its over-valuation), not just growing but doing so faster than US GDP (rising from 5% to 12% of GDP).
GDP shares of Exports of Goods and Services – 2015
Third, look at a leading indicator of economic growth: nationality of corporations in the fastest-growing industries. Eight of the top 13 technology companies are American; this is the pattern in most high-growth tech industries (e.g., software, internet, biotech).
“as pointed out by the economic guru Michael Porter, who also points out, that the level of bureaucracy and red-tape hindrances to business are enormous in the USA.”
The World Bank ranks all the world’s nations by “ease of doing business”. The US ranked as the 7th best in both 2014 and 2015.
(3) The US has a weak education system
“Furthermore, American public schools, hampered as they are by violence and other problems. are not exactly the best in the world. The US level of education is going down…”
The Program for International Student Assessment runs one of the best global assessments of comparative performance of national grade school systems. Their data shows that the US schools perform roughly at the OECD average. We are “not the best in the world”; our poor schools are a disgrace for one of the world’s richest nations. But ratings of the US are stable since 2000 by most measures, not “going down”.
The low rating of our grade schools is a result of inequality, as the US has some of the best schools in the OECD — and some of the worst. For more about this see “Education Gap Between Rich and Poor Is Growing Wider” in the NYT, “The Inequality in Public Schools” by Michael Godsey in the The Atlantic, and new research in “Local education inequities across U.S. revealed in new Stanford data set“.
Omitted from dirges about US education are our colleges and universities. Their large number of foreign students shows that they’re regarded as some of the best in the world.
(4) The dying middle class
“The middle class is disappearing in the USA, with now barely 50% of the population perceiving themselves as middle class. Median incomes have barely improved or even gone down the past 40 years, significantly reducing the middle-section of the tax base, which is normally the most reliable.”
The US middle class is dying, as is the middle class in most developed nations. See “A hollowing middle class” by Peggy Hollinger in the OECD’s Observer, and “Germany’s Middle Class Is Endangered, Too” in Bloomberg. The causes are similar to those afflicting the US.
“The American Dream is a night-mare for most Americans.”
Like most such confident assertions by doomsters, no source is given for this. There are many surveys of personal happiness and opinions about the “direction of the country”. These seldom agree with each other, or show any trend. As Dean Obeidallah shows, “We’ve Been on the Wrong Track Since 1972” — and perhaps longer (i.e., we always worry, since “only the paranoid survive”). Gallup’s “satisfaction with the United States” survey shows that peoples’ opinions have fluctuated with the economy since 1979. The Gallup-Healthways Well-Being Index shows no change since 2008.
(5) We can’t raise taxes on the rich!
“The Laffer-curve, stating that heavy tax-burdens on the rich will incur less total tax-revenues, still applies for the top-section of the US tax base. Any attempts to heavily taxate (fiscate) the upper 10% (or 0.1% !) of the US tax base will lead to US dollar capital-flight, and acute economic crisis.”
First, that’s not what the Laffer Curve means (see Wikipedia for an intro; also note Laffer’s explanation for the curve has changed over time). Second, there is no reason to believe that the current US tax structure is at the peak of the Laffer Curve (above which increases in the marginal tax rate decrease revenue). Third, research on this complex subject has given wildly different estimates for the peak rate — often in the 65-75% range (far above current peak rates).
Perhaps the most interesting contrary evidence is that that the top marginal tax bracket in the US was 70% – 90% during the high-growth decades after WWII.
(6) The poor just need more education
“Poor Americans lack education and training to make them competitive in the global labor-market. America’s left erroneously blames the high percentage of unemployed poor on free trade, but the real problem is the lack of education which prevents the under-class from obtaining productive jobs.”
There is no evidence that there are skill or education shortages in American, jobs ready to be filled by newly-educated poor people. For details see this, and Ignore the hype. There are few shortages of skilled workers in America. Not even the in the STEM fields.
More likely the problem is a shortage of jobs paying a living wage, let alone a wage allowing a middle class lifestyle.
(7) America’s poor at risk of starvation!
“The risk of starvation amongst the poorest in the USA remains high: In Obama’s presidency, one in seven Americans (14%) face the risk of not having enough to eat.”
This misrepresents the USDA’s conclusions. They found that in 2014 14% “had difficulty at some time during the year providing enough food for all their members due to a lack of resources” (roughly 5% of them reported losing weight). The number even remotely at risk of starvation is much smaller: “5.6 percent of U.S. households (6.9 million households) had very low food security … {where} intake of some household members was reduced and normal eating patterns were disrupted at times during the year due to limited resources” (~45% of them reported losing weight).
People starve to death in America (most estimates are several thousand per year), usually from causes other than lack of money (e.g., socially isolated children or elderly, drug abuse, mental illness). Anyone familiar with America’s poor knows that obesity is a far more widespread health problem than starvation.
(8) America’s military decline!
“At the same time, the US military inventory is aging, and declining. The number of US ships and combat aircraft is declining, their average service-age goes up and their operativeness goes down. New US military hardware often take the form of useless ‘white elephants’, meaningless prestige-products like the 20-30 billion dollar Zumwalt class destroyer.
“…In absolute strength levels, the American military is standing still or going backwards. …If military budgets are not increased, the aging of the US military will be tough in the 2020’ies. …and the US military is going down in absolute as well as in relative strength.”
Other than China (playing catch-up in the great power game), the great powers are shrinking their conventional military strength. In the age in which the dominant forms of force are nukes and 4GW, conventional military power has use only in limited forms. US military spending accounts for ~37% of the world total — equal to the sum of the next 7 combined (4 of whom are our allies). While every nation’s military spending fluctuates, not only is there little evidence of America’s loss of military hegemony during the past few generations — it has grown immensely since the fall of the Soviet Union and Eastern Europe’s joining the West.
As for the Zumwalt destroyer, a trial production run cancelled after 3 ships is a bizarre basis to draw dire conclusions about the US military (continuing to build these expensive ships would have been evidence of a dysfunctional military). Also, the per ship cost was $6 billion — not $”20-30 billion” (including the program costs for a planned fleet of 32 on the 3 actually built is absurd).
(9) The US economy is unsustainable!
“The US economy is unsustainable.”
The author provides no evidence for this big assertion. Quite confident on the eve of a new industrial revolution (which might also void all the author’s other forecasts).
Note: the author does not mention one staple of the America is doomed crowd — private debt. It is high, but not unusually so vs. our peers. The US has the fourteenth highest private sector debt/GDP ratio in the OECD (2015, source here), and the fifteenth highest ratio in the OECD of household debt to net disposable income (2014, source here).
Conclusions
The doomster analysis of America is, yet again, not just unsupported but largely false.
When reading these confident claims of End Times for America, remember that misinformation seldom just happens. It usually comes from well-paid propagandists working for special interests. These float through our minds until coalescing into predictions of doom, clouding our vision and sapping our spirits.
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