I went to my doctor today to discuss my weight.
I am 20 pounds overweight.
He told me that the solution is to gain ten pounds.
Our economy is in the toilet.
The government is buried under huge debt.
Consumer credit card debt is at an all-time high.
Banks have stopped lending money.
People aren't spending money on consumer goods.
Economists say the solution is for the government to borrow MORE money, and give it to the banks to encourage them to resume lending, and to the people, so that they will feel secure enough to resume their borrowing and spending.
Thus, the solution is for both government and the people to INCREASE their indebtedness.
This is the only way, they say, to get the economy going.
What's wrong with this picture?
Is our economic health dependent on ever-increasing debt?
If so, what does it say about the long-term viability of the United States?
Indebtedness, like population, cannot keep increasing indefinitely.
Sooner or later, there will be a reckoning.
Is it time for us to re-examine our consumerist lifestyle, and start ignoring all those advertisements urging us to buy "stuff" we don't need?
The result would be a vastly reduced economy and a simpler, less lavish lifestyle.
Some positive side-effects would be a smaller environmental footprint, and less need for massive armed forces to defend "strategic" resources all over the earth.
Just think how much less money our government would need for "defense" if we weren't worried about middle east oil? Would the WTC attack have happened? Would the wars in Kuwait, Iraq and Afghanistan have happened?
Such speculation about past errors is pointless...except that it points to a different role for America in the world, and different philosophy of life for Americans.
We are at a fork in the proverbial road, and as Yogi Berra said, we should take it.
No, seriously, with a new, more progressive President and administration in Washington, I think it is a perfect time to take a hard look at what we want our nation to be. Our options are more limited than they were a few years ago, due to the squandering of our wealth, power and stature in the world. But I think we can still have enormous impact in advancing the causes of peace, tolerance and enlightenment.
But first, we need to clean up our own act.
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Comments: 29
Just think how much money our country would "need" for defense if we spent an amount proportional to the amount the rest of the world spends.
We are spending more on our military and security and any other country in the world...no other country is even close. We spend more than the rest of the world COMBINED.. depending on where you look for the numbers....which are:
As of 2009, the United States government is spending about $1 trillion annually on defense-related purposes.*
The USA is responsible for 46 per cent of the world total (military and defense spending), distantly followed by the UK, France, Japan and China with 4-5 per cent each.*
MILITARY: 54% of our total spending budget and $1,449 billion (1.5 trillion)***
World Wide Military Expenditures****
World $1100 billion 2004 est. [see Note 4]
Rest-of-World [all but USA] $500 billion 2004 est. [see Note 4]
United States $623 billion FY08 budget [see Note 6]
China $65.0 billion 2004 [see Note 1]
Russia $50.0 billion [see Note 5]
France $45.0 billion 2005
United Kingdom $42.8 billion 2005 est.
Japan $41.75 billion 2007
Germany $35.1 billion 2003
Italy $28.2 billion 2003
South Korea $21.1 billion 2003 est.
India $19.0 billion 2005 est.
Saudi Arabia $18.0 billion 2005 est.
*http://en.wikipedia.org/wiki/Military_budget_of_the_United_States
**http://www.globalissues.org/article/75/world-military-spending
***http://www.warresisters.org/pages/piechart.htm
****http://www.globalsecurity.org/military/world/spending.htm
You make many good points, Bert. From a business perspective, I understand the need to invest to stimulate. And I can see and understand the almost reverse logic (or so it seems to most people) that it represents. I don't want to go into the actual logic here, but just offer the explanation of having to invest to reap the benefits. If you starve a business that is already on limping legs, you will only get a collapsed business. And the larger the business, the more people will be effected.
But I do want to support your point whole-heartedly about changing our livestyles. We should not be a nation whose health is only based on what and how much we consume. It is capitalism gone wild - out of control. My daughter spent a summer in LYon, France, living with a family there. There were two generations - a grandmother, mother, and two children - living in a rather small apartment by our standards. The apartment was very nicely decorated with quality pieces, but not packed. They bought fresh, local food every day, cooked together every evening, and spent at least a couple of hours at dinner, savoring their food and each other's company. They had a few outfits each, not closets the size of garages stuffed full of items hardly worn or still with tags. They rarely actually went and purchased any 'goods', and only when what they had was broken or completely worn out. They recycled, they read books, they hardly ever watched TV, they spent their weekends together as a family. And they were very healthy and very happy.
Do the comparison with Americans - we are overweight, unhappy, addicted to drugs & alcohol, whining constantly, angry most of the time. It is very, very sad what this nation has turned into, on the whole. I hope that Obama's moral example will help turn us around, but individuals have to do it too. They have to shut off their stupid TV's and turn back to their families and stop buying utterly meaningless crap.
Joe the Plumber hasn't done so well. He spent most of what he earned on shotguns and NASCAR tickets, and his wife ran the credit cards past their limits on make-up and new clothes. They can't buy school supplies today, and won't be able to feed the kids next month unless something changes. Problem is, the only tool Joe owns is a plunger and he isn't going to make the difference he needs with that.
The wife already stretched out the clothes, so taking them back isn't an option. The shotguns might hold them over a week or two, but what then? They still have all those credit card bills, even if they don't buy anything else.
Joe can either watch his kids starve, or he can take out a loan to buy a snake and a wrench.
Good post and excellent explanation! I find the number presented by Farmer Slim aka Michael H, in his comment, to be quite telling.
Christopher...I think you are right, but please give us some details. What expenditures do you think we can afford? Infrastructure comes to mind. But tax cuts are money down a rathole, right?
Thanks, Michael. That is EXACTLY what I meant, and you nailed it down. Our military spending is totally out of control, and it is driving us to the poorhouse...or I should say contributing to the trip.
Sheryl...I agree that we have to spend money to revive the economy, but if we revive the OLD economy, based on growing debt and mindless consumerism, we are simply backing the train up from the current trainwreck, and then starting off again at full speed into the same trainwreck.
Sandy...Maybe Joe's wife can't wear the clothes, but at least he didn't have to buy them. The Republican campaign paid for them. Remember?
Gary...I hope you are right, but if all these hundreds of billions succeed in re-inflating the economy, a lot of people will try to go back to "business as usual." I think that is unlikely, though. I really think this massive giveaway is going to have a very limited effect. It pains me to say that, because I really want Obama's presidency to be a success. The alternative is unthinkable. Defeat in four years by a Bush/McCain clone who will undo any good that Obama has managed to accomplish, and we will be back in the bad old days of Republican hegemony. How's that for a gen-u-wine nightmare?
James...thanks. Yes, Michael always makes pithy posts. (How's THAT for alliteration!)
I learned long ago that the more things I have, the more I have to take care of, and the less time I have to do meaningful things. If I'm not using something, I give it away. I dress for comfort and appropriate to the weather in clothes that don't require a lot of upkeep. I use the library and seldom buy a book (except on Kindle), although I read a lot.
Last summer, I gave up owning a home and moved into an apartment in a retirement community. What a relief not to own a home! I never liked home ownership, but owned a home because it seemed a good investment and because I thought it gave me more control over my surroundings.
Instead of owning things, I've preferred to spend my money on learning and experience, such as taking classes and travel. These have enriched my life many times over and broadened my outlook.
I don't want to go back to the good old times--I like my computer and the Internet too much--but do we all need everything the other person has? Are some of the things we're being seduced to buy what we really need to make our lives fuller?
I agree with your description of the problems, but I'm not sure we know much about the alternatives. So far, attempts to radically change how the economy operates have not only not delivered on their promises, but resulted in fast track to hell.
But it will take a change in expectations and...values.
Aniko...we are on a fast track to hell now. As I see it, our present course is unsustainable...more and more consumption by more and more people. If we don't learn from this trainwreck, another will follow...and another...and another...
But there's still the underlying problem of required growth. I don't think that threatens us yet, and it may not do so for hundreds of years, but if it's ignored it will be a bad end.
However, I don't agree that debt of itself is a bad thing. It sounds like some people here believe that debt is somehow immoral. That we have borrowed our way into perdition. I think this is as irrational as the belief in unfettered capitalism.
I'm not suggesting a solution. There may not be one, in the largest sense. But I think it's good to see the problem more clearly than blaming people for living beyond their means.
What I meant to say is what Charles said much better:
The growth requirement is the Achilles Heel of capitalism. Unfortunately capitalism is, so far, the most efficient way of distributing goods and services. So far, no centrally planned economy has succeeded. The most successful economies, again so far, have been well regulated capitalist democracies.
Whether we like it or not, that's true. It's possible that we are on a fast track to hell now--but we do have a tendency to think, at any given point, that things are worse than they've ever been before, and everything is about to end. That doesn't mean this isn't actually true at this point, only that our feeling that it is so is not proof that it is.
I agree that things may be very, very bad. I'm also extremely wary of experimentation, because they have a terrible track record--some of it I've seen up close, or from a lot closer than most here. And I'm not sure the consistent disasters are a coincidence either--I suspect we might be dealing with complexities way over our heads, making any attempt at an imposed design (as opposed to tweaking an naturally evolving system by regulation as necessary--is guaranteed to lead to a disaster.
If I sounded optimistic in my first paragraph, let me clarify that I'm not. I suspect too that there might not be a grand fix-it-all solution, and we'll have to do with patches that cover up the holes and give us a little more time.
Some Thoughts on Capitalism and Human Nature
Some Thoughts on Capitalism and Human Nature - Part 2
Nothing remains static in our society or that of the world. Either it grows or it deteriorates and eventually fails. We need sustainable growth, if there is such a thing. I certainly don't want to live in a dying society, with everything becoming more scarce by the day.
In the long run, James, I think we are going to have to learn to live without economic growth, or if we have growth in one sector, we must have "deterioration" elsewhere. World population and consumption of nonrenewable resources simply cannot continue to grow "sustainably."
We are already beyond long-term sustainable world population, and consumption per capita continues to grow! Clearly this cannot continue for long.
around long. In the same vein, officials who act as the recession
is "caused" by short consumer spending might be advised to
turn off the television and spend some time on line.
One thing I have been thinking about is how "our obsession"
with immediate return on investment is causing investors to
look elsewhere for extended returns; namely, to countries that
invest with long term national prosperity in mind, are willing to
put their resources to work building for a future defined as
something more than the next fiscal quarter -- by definition,
a thought antithetical to today's trendy "conservative."
Everybody wants to get rich quick...preferably tomorrow, and that obsession with short-term results is one of the destructive effects of unfettered capitalism, because it forces companies to concentrate on self-destructive strategies instead of looking down the road a bit further. The contrast is vivid when you view, say, Chrysler vs. Honda.
I tend to agree about the world population being more than can be sustained. World leaders have failed to address this at all. The environmental problems we have are all a dirct result of overpopulation. This earth can handle a lot of pollution but not what it has received in recent year..
The Tragedy of the Commons
The link was to an excellent article! I'd not heard the terminology before but the article well describes what I've advocated for a number of years. I'd like to have the open access and freedom in general that was present when I was a kid but I can see where there are too many people in the world to sustain that. I fear for the future of my grandkids and great grandkids.
REsources are going to become more scarce and freedom is going to blimited in the effort to keep the entire thing from failing completely. They may not succeed although I've got a lot of faith that in the long term, man will do what is necessary for his own survival. Problem is, man, as a group, has to be hit over the head with a two by four before he will acknowledge what is as obvious as a brick outhouse!
I agree, and the problem is, not enough people are thinking about that.
I'm not so sure, James. Things seem to be spinning out of control...nuclear weapons proliferation, global warming, irreversible contamination and depletion of vital resources...by the time the danger is recognized by enough people, it may be too late.
I'm embarrassed to look like an apologist for capitalism, but I think it's important to see the problems clearly. An obsession with short term results is not a necessary result of unfettered capitalism. Post WWII we saw decades of industries making solid long term decisions. The current greed culture came in with the Reagan Administration. Your contrasting Chrysler and Honda is odd, suggesting as it does that Honda is not a capitalist concern.
I'm afraid that the problem of greed may be part of a certain current US culture not capitalist per se. That doesn't make it better, just possibly not vulnerable to the same approaches.
You may be correct but the American people and people world wide, have a long record of doing things, not when they should, but when it is nearly too late! I certainly hope that people will recognize the gravity of the situation before it is too late.
Thhink of a person who is in a third world country. Their concern is not with the environment but rather they are hoping to get enough food to feed their families for tonight. Not aware at all of the dangers we all face. And even in this country, there are many who are not concerned about following generations. That is more frightening than ignorance of starving people!
No such agency operates here...indeed, our corporate-money-dominated government would never have allowed it! In that sense, US Capitalism is "unfettered," and Japan's has some controls that limit irresponsible and self-destructive behavior. I think this also accounts for Japanese corporations taking a longer view in formulating business strategy
That's because George and Dick mostly spent their efforts
doing things that had little to do with the nation's long term
economic health. I know a little bit about digital media, which,
along with life sciences and clean energy, is a field predicted
that will continue to grow into the future. In that field, alone,
foreign competition opened up a more than 30 year lead on
the United States companies during the first six years of
Dickie and George.
Contrast with well managed countries (like Japan and Norway)
and find money and talent going into these fields with an
eye to the future, not just the next deal.