Beijing’s Smile and the Demise of U.S. Competitiveness — An Economic Parable in the Making

© 2010 Peter Free

 

13 December 2010

 

 

Pure consumption’s grip on American economic philosophy

 

Three days ago, I lamented the Administration’s lack of the long-term thinking.  Today, Fareed Zakaria did the same in a compare and contrast way.

 

Excerpts include:

 

 

Somehow, no matter what the economic clock says, it's never time in Washington to cut spending or raise taxes.

 

Does anyone believe that Washington will one day develop the political courage it now lacks?

 

It doesn't make much sense for the long-term growth of the American economy. What Washington is trying to do is reignite the consumption bubble - hoping to get Americans to spend money and take out loans.

 

China has a different theory of how to get long-term, sustained growth. The Chinese have doubled their spending on education - with stunning results - and continue to build the world's best infrastructure.

 

Reuters reports that Beijing is contemplating a plan to invest $1.5 trillion over the next five years in seven crucial industries

 

The targeted sectors are alternative energy, biotechnology, new-generation information technology, high-end equipment manufacturing, advanced materials, alternative-fuel cars, and energy-saving and environmentally friendly technologies.

 

Of course, we don't have the money to pay for our new tax plan, so we will borrow it, in part from foreign central banks.

 

While China spends its money to invest in long-term growth, it lends us cash so that we can give ourselves one more big tax break.

 

Someone in Beijing must be smiling.

 

© 2010 Fareed Zakaria, Procrastination economics, Washington Post (13 December 2010) (paragraphs split)

 

 

Not smiling here

 

After at least thirty years of watching us pump ourselves down the septic tank leach field this way, I’m not smiling.

 

Our grandchildren won’t be happy with us, either

 

Our children’s children are going to disrespect our self-indulgent trashing of their futures and the American dream.

 

 

No one to blame but ourselves

 

We can criticize our political leaders, but ultimately the responsibility for failed American leadership is our own.

 

It’s pretty difficult to lead a nation of mall-grazing sheep, who own credit cards and designer wallets.