So how Long will This last: How would you define the US Global Political and Economic Position Today and Moving into the Next Half Century?

[obviousadams]

Just a few things. The demise of the US is, most likely, greatly exaggerated. There are good reasons to be worried about printing money, income disparity, evisceration of traditional manufacturing, immigrants and welfare, political expediency, the naval gazing nature of citizens etc, but I think a lot of these worries may be short sighted. We are in the midst of a large social and economic revolution and the synergy of those changes is yet to be understood. Income disparity typically increases in the early stages of these types of revolution and eventually stabilizes. The children of poor immigrants are likely going to assimilate and become productive adults. Former manufacturing workers will have to find new work. As a government, paying off debts in the future is cheaper than paying them off in the present. While this all may be a house of cards teetering on the edge of collapse, there is also a larger view that puts a lot of individual cogs in perspective.

The biggest problem I see is that everyone assumes someone is steering the ship. While I'm typically a pretty big proponent of the invisible hand I am also suspicious of power. When large organizations, be it corporations, unions, poltical parties, churches (historically anyway), begin using their weight to rent seek or bribe their way into favored positions I begin to worry. I know to some degree this has always been the case but I think the eye of "eternal vigilance" has been hijacked by more selfish pursuits in recent history. The best and most recent example is the real estate boom. Banks, investors, politicians, consumers and the system itself were all to blame. Everyone was doing what met their most immediate needs and it all came crashing down. Worst of all, due to concentrations of power, the people who suffered the worst were the consumers who, while not without guilt, were left to suffer either with underwater mortgages/ government refis, a signficant loss of investments and a huge potential tax bill. Anyway, this whole story is off topic but it is illustrative of what can happen when no one is paying attention to the larger picture.

The reason to be bullish on the American economy are plentiful but the most powerful of which lies in spirit. The spirit of entrepreneurship, of individualism and of income mobility is ingrained not only in the psyche of the individual, but in the fabric of our political, educational and legal system. People in the US have an individual spirit that is almost bred into us. We are brought up knowing we can do whatever our minds can conceive. We have educational systems that promote innovation. We have a legal system that protects intellectual property. We have a large consumer economy that is open to and greatly rewards new ideas. Of course many of us are lazy too but the system is in place for ideas to flourish. While China may have an easy time canniblizing current innovation, fostering a spirit that actually innovates is a far more difficult thing to do and it's where ongoing economic power resides.

The world of driverless cars, 3d printing, artifical intelligence, white collar automation and energy innovation is coming and no one really knows what it looks like. Because of our systems, spirit and resiliency, the US is in a very compelling position going forward. Of course, as Jeff Lebowski would say, this is all just like my opinion man.

[mash]

That would seem logical, but I disagree on the basis of accountability. When there is little to no accountability for poorly run programs, bad decisions and political self interests, budget cuts alone will not force people to be more efficient. Instead it fights a symptom while not dealing directly with the problem.

Cheers

What you're saying may be completely true. But the amount of money, waste and corruption (can you say Halliburton?) that is part of the US defense budget is a problem in itself. This would free up funds to spend on other things that the US desperately needs, and would create jobs (infrastructure). The alternative is to keep doing what they're doing, run up the deficit, and increase their indebtedness to China. Cutting spending will initiate change in a way that otherwise won't happen. No one's going to volunteer to change unless they're forced to.

[Paul3]

What you're saying may be completely true. But the amount of money, waste and corruption (can you say Halliburton?) that is part of the US defense budget is a problem in itself. This would free up funds to spend on other things that the US desperately needs, and would create jobs (infrastructure). The alternative is to keep doing what they're doing, run up the deficit, and increase their indebtedness to China. Cutting spending will initiate change in a way that otherwise won't happen. No one's going to volunteer to change unless they're forced to.

Perhaps I'm misunderstanding you. While I completely agree that the waste, corruption and poor management within the DoD is a massive problem and moving those funds would allow spending in other areas of national interest. I would point out that a single act of cutting spending in one area means reduction of waste is based on at least two assumptions:

1. Waste and mismanagement decrease proportionally to the amount of budget cuts. There is little evidence to say a 10% cut in overall funding would result in a 10% reduction in waste. Waste may very well increase as a percentage of whatever total budget is allotted. Again a requirement for for more accountability.

2. Cutting money from one area (i.e. defense budget) and assigning those money to another area (i.e. education) does not preclude new and increased waste, fraud and mismanagement in the newly funded (education) department. Again increase accountability becomes necessary.

I wholly agree that cutting spending will force changes, but I'm not conifident that those that will be forced to change will make the changes (read: politicians and the perpetual supporting bureaucracy) in the way that you and I would hope they would. Change is necessary, but it is the accountability that must be the "force" behind it.

Great discussion.

[ImTripN2]

"The reason to be bullish on the American economy are plentiful but the most powerful of which lies in spirit. The spirit of entrepreneurship, of individualism and of income mobility is ingrained not only in the psyche of the individual, but in the fabric of our political, educational and legal system. People in the US have an individual spirit that is almost bred into us. We are brought up knowing we can do whatever our minds can conceive. We have educational systems that promote innovation. We have a legal system that protects intellectual property. We have a large consumer economy that is open to and greatly rewards new ideas. Of course many of us are lazy too but the system is in place for ideas to flourish. While China may have an easy time canniblizing current innovation, fostering a spirit that actually innovates is a far more difficult thing to do and it's where ongoing economic power resides."

Most excellent post, thank you. However I would hazzard a guess that you are not of the new generation of Americans who have been taught that capitalism is evil, that America has been built on the backs of slave labor, that it's ok to aspire to mediocracy and that anyone who has working dilligently and has sacrificed to be sucessfull should be cut off at the knees bcause "they" didn't build their success; the credit goes to all and all gains should be shared.

A lot is being said about the recent immigration issues.... I say thank god they are here. They are the ones who will propel America into the next generations of success and innovation. Immigrants come here hungry and grateful for the opportunities that America presents and work hard to succeed. The apathy and self indulgence I see around me from the native sons and daughters in the workplace is apalling. And here's a clue for you young guys.... NOBODY owes you jack ****. If you think you have a crappy education, that's your fault, and it's up to YOU to better yourself, not society.

[SaintLuis]

The liberals don't like the 'starve the beast' strategy with regard to military spending cuts? I think most liberals would like to see less spent on the military.

Lots of conservatives too. I think they just prefer to prioritize the more obnoxious wasteful areas, like the CMS dodgeball/shell game with the Inspector General on Medicare/Medicaid fraud and abuse, or the free-for-all we currently have on disability insurance.

It's one thing to want to help the needy, it's an entirely different thing to lie to the people funding the "help" about where there money is going, while simultaneously hiding the fact that those confiscated dollars intended to help, never even land with the needy. Then, you just have people on both ends of the process getting screwed, and the government in between covering their butts.

That leaves us with a government that isn't tellign the truth to the people they take money from, isn't helping the needy with the money, therefore only exist to cover their own mistakes. That's bad government. No one needs that government.

Reading the heavily scrubbed reports from the IG are nauseating, especially knowing that the error rates are so insanely politicized and negotiated before they are published, that the truth is something far worse than even the bad news they report.

[DrunkenMonkey]

Lots of conservatives too. I think they just prefer to prioritize the more obnoxious wasteful areas, like the CMS dodgeball/shell game with the Inspector General on Medicare/Medicaid fraud and abuse, or the free-for-all we currently have on disability insurance.

It's one thing to want to help the needy, it's an entirely different thing to lie to the people funding the "help" about where there money is going, while simultaneously hiding the fact that those confiscated dollars intended to help, never even land with the needy. Then, you just have people on both ends of the process getting screwed, and the government in between covering their butts.

That leaves us with a government that isn't tellign the truth to the people they take money from, isn't helping the needy with the money, therefore only exist to cover their own mistakes. That's bad government. No one needs that government.

Reading the heavily scrubbed reports from the IG are nauseating, especially knowing that the error rates are so insanely politicized and negotiated before they are published, that the truth is something far worse than even the bad news they report.

But the discussion you were commenting on was about cutting military spending.

[warren516]

I'm actually pleasantly surprised that this discussion didn't get out of hand.

Looking back over the last 50-75 years, the world has looked to the US to be the world’s policeman. I think that this needs to change and that the United States needs to be more concerned with what is happening inside its own boarders than what’s happening in the world. I think the US in 50 years will not be a Global / Political leader. I’m saying this as a 50 yr old and looking at today’s youth in the United States. They are being taught at an early age that everyone is equal in life and there are no winners and losers. Everyone on their soccer or baseball team gets a ‘participation’ trophy and this is being done so their little feelings are not hurt. I personally don’t think this is right. This makes them feel entitled to everything and they don’t have a drive to succeed. It doesn’t teach them that working hard has its own reward. I feel this attitude will hurt the US in 50 years.

Concerning the economic position of the United States and what might happen in the next 50 years. We have become more of service orientated country and less of a manufacturing country over the past 25 years. This puts the US into a very tough position if china, for some reason, cuts all ties with the United States and stops all exports to the US. We need to find ways to start bringing manufacturing back into the US and make it cost effective to do. Otherwise we’ll be relying on other countries to our day to day goods. We need to be able to sell products to balance the trade deficit

[CaptainQuintero]

The military budgets are not as simple as cutting exercises, the spending/contacts especially in R&D are utterly corrupt to the core and limiting the budgets won't change that.

If the best phrase for progress is 'aim high and succeed' the one that hangs on the walls of military admin offices is 'aim low and fail':

There is a problem so a department goes cap in hand to the gvmt to get funds. The department now has cash coming in to find a solution to said problem. The issue is, if a solution is found then that cash stops coming in. People twigged on that there is a mutual cash making opportunity in this:

Do your time in the military admin giving these 'aim low and fail' contracts to your friends who have retired and set up their own private companies, who wont solve the original problem, then retire and become a CEO of your friends private company while the previous CEO goes on to be on special gvmt committees who allocate funds to military departments.

Rinse and repeat. It's been going on non stop since Vietnam and it won't stop until something radical changes, but the people who have the ability to force change are already in this circle of corruption and farce so it won't change no matter the budget.

The same issue applies to the medical industry, energy sector, infrastructure etc the list goes on.

That's the reason for the deficit and debt, and it's only getting worse.

If you can figure out how to solve those issues then you can have a working government again. But both parties are 'in' on the gravy train, so there isn't a political solution to the problem, what's the remaining options?

The dept of homeland sec buying up billions of rounds of ammo and fitting out the police with armoured personnel carriers and gear better than the troops fighting in the Middle East probably speaks more clearly of what the most effective answer to ridding this corruption is, better than anything I could write.

[obviousadams]

"The reason to be bullish on the American economy are plentiful but the most powerful of which lies in spirit. The spirit of entrepreneurship, of individualism and of income mobility is ingrained not only in the psyche of the individual, but in the fabric of our political, educational and legal system. People in the US have an individual spirit that is almost bred into us. We are brought up knowing we can do whatever our minds can conceive. We have educational systems that promote innovation. We have a legal system that protects intellectual property. We have a large consumer economy that is open to and greatly rewards new ideas. Of course many of us are lazy too but the system is in place for ideas to flourish. While China may have an easy time canniblizing current innovation, fostering a spirit that actually innovates is a far more difficult thing to do and it's where ongoing economic power resides."

Most excellent post, thank you. However I would hazzard a guess that you are not of the new generation of Americans who have been taught that capitalism is evil, that America has been built on the backs of slave labor, that it's ok to aspire to mediocracy and that anyone who has working dilligently and has sacrificed to be sucessfull should be cut off at the knees bcause "they" didn't build their success; the credit goes to all and all gains should be shared.

A lot is being said about the recent immigration issues.... I say thank god they are here. They are the ones who will propel America into the next generations of success and innovation. Immigrants come here hungry and grateful for the opportunities that America presents and work hard to succeed. The apathy and self indulgence I see around me from the native sons and daughters in the workplace is apalling. And here's a clue for you young guys.... NOBODY owes you jack ****. If you think you have a crappy education, that's your fault, and it's up to YOU to better yourself, not society.

Yup, not anti capitalist by any stretch but I think the slavery thing has some truth to it. As pre- revolutionary America grew one of the largest bottlenecks was labor. Initially labor was provided by prisoners (often shipped over form England) who worked off their sentences but it was hard to keep them after their sentence was served because land was cheap and plentiful. The other issue was if they escaped they were hard to identify. Enter african slaves who could be owned as property and were easy to identify by the color of their skin. The expansion of the early economy sort of was built on the backs of slaves, but it was also liberated by the industrial revolution that put women to work and evolved into gender equality, labor laws and eventually a system that allowed the descendents of slaves to become like the 15 largest economy in the world (the US african american economy is like 15th in the world in purchasing power). Some aspects of our history are unsavory, but the outcome was positive for all of us.

So while there is some truth there and it's good to be clear on facts rather than fairy tales, it's also silly to bash capitalism while comfortably nestled in the bosom capitalism has crafted for you. I'd charge any of those folks who believe capitalism is evil to put their money where their mouth is and only invest in companies that don't make any money .

[shlomo]

Perhaps I'm misunderstanding you. While I completely agree that the waste, corruption and poor management within the DoD is a massive problem and moving those funds would allow spending in other areas of national interest. I would point out that a single act of cutting spending in one area means reduction of waste is based on at least two assumptions:

1. Waste and mismanagement decrease proportionally to the amount of budget cuts. There is little evidence to say a 10% cut in overall funding would result in a 10% reduction in waste. Waste may very well increase as a percentage of whatever total budget is allotted. Again a requirement for for more accountability.

2. Cutting money from one area (i.e. defense budget) and assigning those money to another area (i.e. education) does not preclude new and increased waste, fraud and mismanagement in the newly funded (education) department. Again increase accountability becomes necessary.

I wholly agree that cutting spending will force changes, but I'm not conifident that those that will be forced to change will make the changes (read: politicians and the perpetual supporting bureaucracy) in the way that you and I would hope they would. Change is necessary, but it is the accountability that must be the "force" behind it.

Great discussion.

Your last paragraph sums it up perfectly. You can cut military spending down to hundreds dollars, and somebody will try and steal half of it still...

[Fosgate]

Kind of a shocking article I came across but a major reason for the division in this country.

http://www.cnsnews.com/commentary/terence-p-jeffrey/86m-full-time-private-sector-workers-sustain-148m-benefit-takers

[obviousadams]

Everything can be cut. A great point is made above about cuts not equating to efficiency. As a matter of fact, I bet cuts result in inefficiency. It's to gov't ultimate benefit to cut things that hurt and waste money on useless things in order to justify it's increased appetite.

The only solutions I've heard that I can see helping are

Term limits perhaps combined with longer stretches between re-election. Term limits so congress has to live under it's own laws and longer terms so they can think longer term than 2 or 4 years. Maybe 5 year terms for everyone and 2 terms max.

Public refocusing on cutting legislation rather than passing it. More laws are eventually bad for all of us.

Simplification of the tax code- cutting taxes, eliminating all deductions, simplifying rates and, if rates are have to be progressive, then any future tax increases must apply to all rates equally. Think about the public debate we would have if congress wanted to increase taxes on everyone by say 1%- they better have a good reason or that vote wouldn't look too hot come re-election time.

PM me for details on contributing to my PAC- LOL.

[Cmontoya79]

The amount of dollars that go into funding these welfare benefits programs is pennies in comparison to other beyond huge budgets. I really don't think any current division or perceived division is caused by this.

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[Bahnofstrasse]

What about Mother Russia on the move? A very good snapshot of the Ukraine powder keg. Former KGB operative versus the Community Organizer. Get your popcorn ready...

http://www.dailymail.co.uk/news/article-2605578/Edward-Lucas-I-hope-Im-wrong-historians-look-say-start-World-War-III.html

[stogieluver]

Kind of a shocking article I came across but a major reason for the division in this country.

http://www.cnsnews.com/commentary/terence-p-jeffrey/86m-full-time-private-sector-workers-sustain-148m-benefit-takers

Exactly correct. The crux of the problem well explained. It's not going to end well. I'm not at all optomistic it will. This country has seen its better days.

[poisonowns]

Well, according to a lot of people, America should just stay out of the Ukraine conflict. At this point I agree, but this looks like it's going to keep continuing to get messy. The question is how long do we sit around and let it get messy before we (America) get involved? Do we get involved at all at any point?

Aside from their actions in Ukraine, they've also been moving towards an agreement to purchase 500,000 barrels of Iranian oil per day, which crushes the export limit that was sanctioned against them last year.

Oh yeah, and what's the story with the chemical weapons that the Syrians were going to be turning over to Russia by the beginning of February? http://www.npr.org/2014/04/13/302542397/new-claims-of-poison-gas-attack-in-syria

[Paul3]

Well, according to a lot of people, America should just stay out of the Ukraine conflict. At this point I agree, but this looks like it's going to keep continuing to get messy. The question is how long do we sit around and let it get messy before we (America) get involved? Do we get involved at all at any point?

Damned if we do, damned if we don't. Some want us to be the world police right up until they don't want us to be the world police.

[Guyman1966]

Do we know who won the cigar?

[El Presidente]

Every country has it's challenges.

in Oz we are Capitalism/democracy at it's best in that you vote in the party that promises the most middle class pork barreling that we can't afford

It goes in cycles. We are currently in the cycle of reigning in our middle class welfare spending. Once the public get's tired of that then we will vote in the party who promises the most middle class spending. An economic Yo Yo.

China has it's concerns. One of the fastest aging populations on earth being one. I also wouldn't like trying to manage that tightrope of growth and spreading wealth. Production costs are rising. Other countries are becoming more attractive for international companies by the day.

The US. Trillions spent to pump prime the economy resulting in 2-3% growth. Eeek. At least the Stock market has created wealth but I am not sure that is the scorecard anyone should be using.

Europe mostly a basket case. Thank God for the Germans holding it together.

Outside of China, Asia is doing quite well on the back of a vibrant young and increasingly highly educated populace. If I was giving advice to my kids it would be to study and relocate to Singapore, Hong Kong, even Vietnam.

[El Presidente]

By the way....I will draw the winner of the Partagas Lusi Gran Reserva tomorrow

[ptrthgr8]

Huzzah!

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[StingMeadery]

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[Fosgate]

The US wont get involved in the Ukraine. There is a lot of talk and posturing but look at what officially is happening. The administration is with holding selling arms and equipment to the Ukraine. Then an official comes out and says they are considering sending arms to the Ukraine only to have Obama state 24hrs later they are not considering sending arms. The U.S. has got too much going on at home and will not lift a finger unless maybe one of it's close long term allies gets into a scrap. America has been at war for far too long and she's getting weary of it and Russia see's that.

We have way to many internal social issues going on right now. Cities declaring Bankruptcy, the shear numbers of Americans who are not working vs those that are supporting more than half the population on assistance. Then look at the mistrust with the govt over scandals like the NSA Spying, Benghazi, IRS, Healthcare reform, "Fiscal cliff", Fast and Furious and many more. Then top it off that you can't get congress to agree on what to order for lunch let alone policy with a president that just sits and points at who's fault it is rather than trying to bring sides together. I don't see anything changing economically until we shuffle the deck in Congress and the White House at the next elections. But then what? What candidates will be up in front to represent us? Will it be more of the having to vote for lesser of two evils again? Or will we have someone who truly wants to lead this country and loves everything about this country? Will they have both the balls and the brains to motivate the country to move with him and take pride with themselves once again? One who can persuade rather than coerce congress to act?

[galtline]

Who is John Galt ?

[El Presidente]

Have been caught up in Easter Family celebrations. To be fair I will hold off the draw until Monday when Di can give me a hand.