Can we imagine a world without the United States in it?
Recent headlines would have us believe that we are moments away from just such an eventuality. While history has taught us that all empires must eventually end, for various reasons I still believe that America will continue to endure far, far longer than most doomsters would have us believe.
Of course, there is no question that as a nation, the US of A had to now make great changes in order to right its current economic woes. The national debt is ridiculously high ... the government spends far more than it takes in, the financial regulation enforcement system is a joke. Just more regulation is not necessarily the answer. Better enforcement of existing rules is.
In 1999 a concerned Wall Street insider sent the SEC a 19 page document that explained in clear, easily understood English the exact nature of the alleged fraud being perpetrated by Bernard Madoff. Point by point he laid out how Madoff had to be lying.
The SEC just had to match the trade tickets with the reported counter parties and they would have busted this fraud wide open. I’d like to believe that they weren’t paid off ... but if corruption wasn’t at the root of this carelessness then, the only other explanation is total incompetence. For most however, the idea of a corrupt agency would sit better than an incompetent one.
President elect, Barack Obama has promised change. His time is almost here. The SEC essentially needs to be started over again. The U.S. Government has started enacting the largest stimulus package in US and indeed world history. I hope they'll earmark some of that money to funding efficient enforcement.
Some clear winners from all of this government spending will no doubt be the green technology sector, infrastructure, heavy equipment and education companies.
That leads us to the question of who is going to pay for all of this lavish spending?
It is the rest of the world, that’s who. They will buy up US Government bonds like they were going out of fashion.
Well, because the fastest way to get their own economies to turn is to help the US economy turn up first. The U.S. is the engine of global economic growth.
It may not always be that way because Asia is fast catching up and the Europeans will finally get their act together and start acting in a more cogent manner. But till then my friends, in the real world we live in today, it’s the US economy that drives the world economy.
Where do you think China, Japan and the Arab world’s huge foreign reserves came from? From US residents massive buying habits. That’s where all of that global wealth came from. US buying habits paid for China’s shiny new roads, paid for Dubai’s gleaming new towers, and gave Japan the world’s second largest GNP. US buying habits, not theirs. These countries have nothing, build nothing, sell nothing without US demand.
US citizens are the most efficient and hardest working group of people in the developed world. Their collective earning power is truly magnificent. Their limitless belief in themselves and in a brighter tomorrow is their greatest economic weapon.
Let’s be clear though, Americans have gorged themselves on a plate of plenty that was fueled by easy credit and massive financial leverage. Now, they have to pay the price. That means 2009 will be a very tough year. Unemployment will rise, crime will increase and many more families will lose their homes.
In short, Americans will experience the hardest recession they’ve seen since the 1930’s. Personally, I don’t see government intervention reaching consumers fast enough to stave off severe pain in the so called “real” economy.
However, let’s not confuse a severe cold with a terminal illness. I see many jumping on the “America is dead” bandwagon. America is not some abstract idea. It’s about some very resilient people that will refuse to embrace this media-fueled dim view of America’s future. I am confident America we will overcome.
The US may be battered and bruised, but I very much doubt there is anyone or any country out there that we will replace America. END