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September 2, 2010
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We want a better life now
Published October 8, 2008
So Republican presidential candidate likes to shoot craps and Democratic candidate Barack Obama has loose ties to a 1960s domestic terrorist.
Why would I care about either of these examples of mudslinging when the Dow Jones has dropped 24 percent this year?
I wonder if either of the candidates can name what this country’s largest export is? Can you?
Well, here is a hint – it isn’t tangible. If you are like me, that means what you guessed is way off the mark.
Nope, while other countries are good at manufacturing things like cars and TVs, we have become wild about manufacturing debt. On average, the U.S. Treasury has been selling about $700 billion in debt securities since 2005. And when we do something here in America, we do it right. That is why European and Asian countries have been scrambling about this week as the U.S. has been in the weeks prior to shore up their economic infrastructure. So many countries had invested in the U.S. debts when our market started to crumble, we took everyone down with us.
With our own woes to worry about, I am sure you are wondering why we should care about the foreign markets. Well, it’s simple really. After this debacle, foreign investment in this country is sure to slow down as investors become leery after this is all said and done.
We are on the brink of a worldwide recession, according to some economists. And it all started right here in the U.S.
Some could point the fingers at this all starting with the administration of President Ronald Reagan, a time some have dubbed the “Era of Deregulation.” It was also a time when unprecedented (at the time) levels of money was borrowed by the government, starting with Japan’s interest in U.S. debt. Then in the 1990s the U.S. saw a reduction in its debt owed to foreign investors. This changed later in the decade as an economic boom arrived. This boom came to an end in 2001, and we have been borrowing since.
The result: a trade deficit which grew from $114 billion in 1995 to $788 billion in 2006, though it has fallen recently to $731 billion in 2007.
The amazing thing is if the U.S. balanced its budget, like we all do with our little checkbooks or online now, this deficit would evaporate. Unless we get heading in a different direction soon and start cutting back on our borrowing as a nation, we are doing little but just awaiting another debacle after this one subsides.
At the time of writing this, I am awaiting impatiently to see the next presidential debate. I want to see what inroads these candidates can allude to as they make plans to fix what ails this country. In a stark reality, whoever loses this presidential race may be the actual winner. It is going to take more than four years to fix the many problems this country is faced with.
I am not sure either candidate can implement policies that will extend their shelf life in the White House.
As a country we tend to be impatient.
We want a better life now.
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