Sun Setting on American Century - Part 2

Editor's Note: The following work is the second part in a series contributed by attorney, economist and author Perry L. Weed. Weed's article raises distinct observations about America's troubled economy.

Much of the discussion of America’s economic troubles, indebtedness and deterioration is incomplete and inconsequential, dominated as it is by denial, ideology and empty rhetoric. The official economic data are too often misleading and inadequate. Critical thinking and effective planning are in short supply. Despite the optimistic spin from Washington and Wall Street, Americans know from the financial hardships of their daily lives that times are getting worse.

Few major national leaders and qualified analysts publicly and comprehensively discuss American economic decline. Those who do too often focus on short-run, upbeat, easily quantifiable data. They avoid the complex, underlying and long-term problems facing our economy and, with this omission, the means for our nation to achieve renewed and sustained economic vitality. Even those who do venture to discuss limited aspects of our current decline tend not to address the profound historic shifts: the end of the American Century, our drift toward national bankruptcy, and the pressures of world markets and cheap labor that threaten our standard of living. Blind reliance on the resilience and past successes of the U.S. economy is misplaced. Today, the nation is confronted by fierce competition, rapid change, new trade realities and the dynamics of a financial complexity and interdependence that we neither control nor adequately understand.

Every day Americans grapple with financial squeeze, soaring food and gas prices, job insecurity and the frenzied demands of the workplace, the commute and the two-parent working household. They see globalization fracturing the traditional linkage of skills, education and wages. They see the longstanding social contract unraveling – flat or falling wages for 80 percent of Americans, unaffordable health care, higher education’s spiraling out of reach and with it the promise of upward mobility, and the gradual demise of pension and retirement health plans – the mainstay for aging Americans. Yet well-heeled political and media elites wonder aloud why Americans are anxious and worried about their economic security.

Americans now spend more than they earn to maintain their standard of living. Awash in debt, they continue to borrow to live beyond their means. They largely allocate their resources to consumption, not investment and savings. The country is engaged in the biggest borrowing binge in the nation’s history. Families have amassed record housing, auto, education and credit card debt. Likewise, a growing number of states and cities are staggering under out-of-control debt. Uncle Sam is broke. The nation’s federal deficit and debt are at record levels. The world’s largest debtor cannot remain the world’s superpower.

For our economic lifeblood we now rely on the savings of foreign competitors; they are the ones accumulating claims on future U.S. output. As the debt piles up, we are wantonly incurring obligations, for which future generations of Americans will pay. Our present spending and borrowing propensities rank as one of the nation’s greatest weaknesses, the equal of our faltering competitiveness.

The increasing U.S. addiction to foreign oil supplies, with their skyrocketing costs, is not sustainable. It transfers our wealth to potential adversaries, restricts our military and foreign policy options and erodes our economy. Dependence on foreign oil now exceeds two-thirds of our requirements. Intensifying scarcity of energy supplies, the rapid growth in world demand, and climate change are converging to heighten the destabilizing impact on the United States. Washington is still in denial, lost in empty rhetoric and superficial gestures.

Health care, including Medicare coverage of over 43 million, continues to enlarge its share of the economy, its escalating costs in recent years running two and three times the inflation rate and approaching 20 percent of the gross domestic product. Estimates from the Government Accountability Office make clear that without massive overhaul of the entire healthcare system the government’s finances will collapse.

In a growing number of industries, the U.S. is losing its share of total world exports and its international competitive edge. The economy is producing fewer and fewer marketable products; it is losing its former advantage in innovating and diffusing new technologies. Wal-Mart rises on the sale of Asian-produced goods. We have degenerated from a General Motors economy to a Wal-Mart economy. Fifty years later, if what is good for Wal-Mart is good for the country – Good Luck, America!

To follow the whole article, select from the links below.

Sun Setting on American Century Part 1
Sun Setting on American Century Part 3

Click Here For Solutions To America's Economic Problems

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