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US must make cuts or risk economic failure
Published: 10 June, 2011, 00:36
Edited: 18 June, 2011, 01:53
TAGS: Crisis, Politics, Budget, USA, Government Spending, Economy
The US economy continues to stagnate and slide, many European nations are showing increased growth and Chinese manufacturing is picking up. The US dollar is flat, America’s credit is in question and all signs point to more trouble.
So, now what – what comes next in solving America’s economic woes and fixing the global economic system?
Author and well known international investor Jim Rogers said the US is in terrible trouble. Congress should act swiftly to cut spending dramatically to save the economy.
“They should take a chainsaw and cut spending. America is going down the tubes,” he commented. “America is the largest debtor nation.”
He said cuts must be made universally, to defense, entitlements, and other areas. No one area can be left uncut.
“We’ve got to cut everything,” Rogers said.
Without immediate and dramatic action, the US and global economies will be unable to prosper in the future. Further crisis will follow unless cuts are made. The government can only print and borrow money for so long.
“I wouldn’t lend any money to the United states government,” he said, explaining that America has to get its system in order or avoid being cut off by global lenders. “Eventually they will stop flat out.”
Rogers argued that more quantitative easing may be on the way, warning however that printing money only leads to higher prices, increased interest rates and inflation.
“Inflation by definition is prices rising,” he said, noting that people should begin to invest not in currency but in commodities that will rise in value – notably gold, silver and other precious metals.
One solution to America’s economic woes would be to hire smarter government workers to make policy. He contended that US government employees are not the smartest group of people. If the government focused its resources and recruiting efforts to target the cream of the crop, the US would create smarter policy.
“Most of the people who go into government in the US aren’t the brightest and smartest people,” Rogers said. “They aren’t very smart people or they wouldn’t be working for the government.”
The big picture solution for the US economy, according to Rogers, would be absolute tax reform, combined with spending cuts and litigation policy reform.
“Cut taxes dramatically. You’ve got to encourage people to save and invest,” he said.
10.06.2011, 00:34
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10.06.2011, 00:59
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U.S. National Dept is 14.776.967.000.000$ (June 14, 2011). In market economy, it is necessary to cut spending and raise taxes to lower the National Dept. Moreover, none of the major countries - or even a dozen in total – have not such a huge military commitment and haven’t so many stationed overseas military troops, as the United States, and it’s weigh heavily on U.S. economy. WWII was an excellent reason for the U.S. to lend millions of dollars to Europe, it gave impetus to the U.S. in the mid-20th century, and also make the U.S. dollar is the currency most used in international transactions and is one of the world's reserve currencies. WWIII will not start, because it would mean the end of all. So the U.S. government start to destabilize others countries and areas, to pull(directly or indirectly) the money from there, get a lower prices contract for the oil, and etc. it will help to treat the symptoms, but not the disease.
There is no political legitimacy for cutting entitlements at this juncture. Until the US brings the banksters to justice and changes its imperial ways (wars, bases, wasteful spending--i.e., billion dollar embassy in Iraq, oil company subsidies, and on and on), there will be no legitimate basis for austerity measures. The income tax system needs to be replaced with a value added tax on products and services. Besides the vat, there should be no other taxes at any government level. America can not afford to be a superpower any more. That should be the first admission on the road to recovery.