America’s debt crisis - a good thing?

By Alex Hutchins

Since I do not hold a doctoral degree in Economics, my perspectives will be derived from what others have said, from my understanding of my reading on the subject, and from my observations during my 40 years in the marketplace working.  My thoughts are my own and do not represent the thoughts or opinions of others associated with this blog.

In Adam Smith’s Wealth of Nations masterpiece about the free market enterprise system, an invisible hand regulates the market place; which means that companies rise and fall based upon how they are managed and how quickly they change to meet the changing needs of the customer. Economics is defined as the study of the allocation of scarce resources that have multiple uses; and, a first year Economics student understand that price is used to regulate the allocation and distribution of these scarce resources.

Throughout America’s recent history, let’s say since 1975, the American government has used taxpayers dollars to support and/or bailout a variety of American Industries, such as the farming industry (with price supports), the savings and loan industry, the automotive industry, the real estate industry, and the banking industry just to name a few.  Top 6 US government bailouts.

While some may argue that America grew too quickly between 1950 and 1980 and that this growth set off a series of cascading events that eventually led to our current situation, I propose a much simpler but more radical approach and that is that the government should have never bailed out any company of any industry; and, therein lies the foundations and the systemic roots of our current situation.  We violated the invisible hand concept about which Adam Smith described in his book and did so with obviously the best of intentions.

There has been a massive shift of wealth from America to other parts of the world since 1950;   for instance, importing more than is exported, buying Japanese automobiles and electronics, purchasing petroleum crude oil from OPEC, and most recently borrowing money from China.

America’s high wages, high benefits packages, low productivity measures, and need to own extremely highly levels of debt have worsened this imbalanced situation.  Yes, there is greed in this country but this greed does not just lie on the shoulders of our politicians and businesses, but on the shoulders of all Americans who eat too much, smoke too much, drink too much, consume too much, and expect someone else to always take care of them.

As America fails and as her companies fail, some other foreign business enterprise, person, or government will step up to the plate and purchase our leftovers and while ownership will be held outside America, it will give Americans jobs; however, those jobs will be at a greatly reduced level of income as well as benefits; and, Americans will learn like the rest of the world, that economic growth is better if it is slow, consistent, and has continuity.  And yes, there will still be a place for people like Bill Gates and Steve Jobs, and America will still have Hollywood and professional sports and professional musicians like the rest of the world, they will just be paid less.  America’s economic crisis will bring everyone together again and that is a good thing.

How does the rest of the world see Americans? 

Concerned that:

4% of the population (US) uses 25% of the world’s oil

America watched Hitler for 4 years before they did something

America sees itself as saving the rest of the world from WWI

Christians in America are those only concerned with gays and abortion and not incarnation and redemption

Americans are mixing politics and religion with wars in Middle East

Americans only help the rest of the world if it is militarily strategic or results in oil

Americans have created adverse cultural changes around the world – celebrity status

Miss America Pageants have ignorant contestants representing US

America’s health care for its citizens is ranked 37^Th in the world

America’s corporations have too much political power

Aside from our War with Great Britain for Independence, our Civil War, the Alamo, and 9/11, Americans do not know what it is like to have a foreign country invade your homeland and destroy your cities, schools, businesses, and farms.  Most Americans do not know what it is like to grow up in poverty or through the Great Depression like my parents experienced.  Americans take for granted their way of life which is really what those 10 Perception points above address.

America is great and can be greater if we would just learn to look through other people’s eyes.  America needs to stop consuming the world’s resources because they are finite not infinite.  Americans only come together when there is a natural disaster or when something happens like 9/11 but then after a few months it is business as usual, life as normal, and we act like it never happened.  On the whole, only cancer patients or terminally ill patients fully grasp what it means to be alive for another day and how precious life is, not just for an American but for all citizens of the world.

We should really care what others think of us.  We should really care what the rest of the world thinks about us.  If America is the greatest nation in the world, and I believe that we are; then, we should set the example and help the rest of the world to follow, not just sit on top of our “lifestyle” mountain looking down on the rest of the world, making condescending comments.

Americans have an opportunity to change and that is a good thing!