Break, broke, broken

English: Fareed Zakaria, American journalist a...

English: Fareed Zakaria, American journalist and author (Photo credit: Wikipedia)

When things wear out or break, good maintenance practice is to fix or replace them. When an individual or nation is short of cash or credit (broke), then maintenance is deferred. The US is in that position now. Devoting too much of our resources to defense and a sizable portion of the rest to social programs, we are cash-strapped to invest in education, research and infrastructure that will grow our economy in the future.

We defeated the USSR in the Cold War, because we increased our defense spending to the point that they could not compete. Their economy cracked under the strain. We are headed in the same direction with China, but now we are the ones whose economy is showing the strains. If our economy grows at 2-3% per year and the Chinese economy grows at 9-10% per year, the simple laws of interest compounding ensure that they will have the capacity to grow all their expenditures, civilian and defense, at a faster rate than we can.

It is my belief that we must grow our economy faster if we wish to remain a superpower. We will never grow our economy as fast as China does, but according to Fareed Zakaria, China is about to experience slower growth, around 6%, due to the sheer size of their economy. Therefore, the parties in Washington must stop their bickering and put our economy on a sustainable path to recovery. We have a more educated work force than the Chinese do. We should encourage everyone’s participation in the economy to reap maximum benefits for them and for the US.

Guns and butter

The White House at night

Image via Wikipedia

Guns and butter is a metaphor for the division of GNP into a portion devoted to the military and the remainder devoted to civilian purposes. During the Vietnam War, the US believed that it could afford both. Even with 10% surtax, we were wrong, and the attempt to afford both simultaneously started an inflation that has continued in fits and starts ever since. Now we are less able to afford both at the same time than we were during the 1960s.

 

Solving our current economic problems with less revenue, rather than more, is a recipe for slow motion disaster. The majority of the country cannot afford to support our current military commitments and a wealthy class of drones who take more from the economy than they contribute. Our leaders must lead on behalf of the vast majority of our citizens, not on behalf of the wealthiest few. We believe in government of the people, by the people, for the people. We will NOT accept government of the few, by the few, for the few.