James Leroy Wilson's blog

Thursday, March 13, 2008

Decline and Fall Update

Two years ago I published The Decline and Fall of the United States of America, which marks March 23, 2006, the day the Fed stopped reporting the total amount of dollars in the world, as the beginning of the end. Since then,

Some of this was inevitable, because of the long-term looming crisis of Social Security and Medicare financing. If the U.S. government took no action to reform these entitlement programs, foreign investors would, sooner or later, question the sustainability of the American Dream.

And the U.S. government took no action. Bush's only action was a Social Security "privatization" scheme that didn't address the core financing problem, and in any case was more than offset by his insistence on expanding Medicare entitlements. Congress was worse than useless.

To be fair, I doubt that other industrialized countries, which provide most of our foreign investment, are any more responsible regarding their own entitlement programs. Then again, they're also not wasting hundreds of billions of dollars on "Defense," most of which goes to bases in other countries, domestic pork-barrel projects, and costly wars that do nothing to protect the United States and American citizens.

Had Bush and Congress merely held discretionary spending to late-1990's levels and avoided a bellicose foreign policy - in short, had they done nothing, our situation wouldn't be nearly so dire as it is today.

Whatever one may think about the gold standard, if people would rather invest in an inanimate object such as a metal, rather than in a business enterprise that has people dividing labor, trying new ideas, and creating wealth, we know that the country is generally inhospitable to business enterprise. And that means the standard of living will not increase and will probably decrease substantially over time. And this has to change.

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