Having a committee of twelve instead of the Congress as a whole address the debt and deficit issues facing our nation is quite similar to the Greek and Italian governments selecting 'technocrats' to deal with their budgetary and fiscal issues. The politicians continue to punt when they can.
Politicians of all sizes and shapes and in all places are seemingly unable or unwilling to act on their own or in the open concerning solutions to the fundamental worldwide issues of national deficits and debt levels.
They just don't want to take the 'political risk' of upsetting their constituents by taking action themselves. As a result, they designate groups to meet secretly or select non-political technocrats to somehow remedy the problems created by the elected officials.
Doesn't sound much like self government in a free and open society, does it?
As with our 12-member super committee, the new technocratic government leaders of Greece and Italy are set up to take the blame if they're not successful. On the other hand, the rest of the politicians will be center stage to accept the credit if the committee achieves success.
This government charade could be written off as nothing more than silly political gamesmanship if it weren't so serious. What's at stake?
In CEOs Get Warnings About 2012, the societal threat was put directly:
"Just how likely is U.S. business to get whipsawed by troubles in the year ahead?
"If you haven't thrown up yet, you're getting ready to," Erskine Bowles, former co-chair of the national fiscal responsibility commission, told a group of CEOs in Washington this week. Efforts to cut the deficit are falling short, he said. Congress is in seizure. Calamity beckons.
We've got to spend our money more wisely, just like you guys do. We have this treaty with Taiwan that we'll protect Taiwan if they're invaded by the Chinese. There's only one problem with that: We've got to borrow the money from China to do it!
His shtick brought the house down, but there was no mistaking the nervous edge to the laughter."
Later the article points out how much Asian consumer spending will increase by 2030 compared to that in North America and other areas:
"
{Click hereinabove on the article itself and then click again on the chart for easier reading.}
As the chart reveals, North American consumer spending is projected to remain flat from 2009 to 2030 at $5.5 trillion and $5.6 trillion, respectively.
In Europe spending is expected to increase from $8.1 trillion to $11.1 trillion.
The biggie, however, is that Asian consumer spending should grow from $4.9 trillion in 2009 (slightly less than North America) to more than six times that level, or $32.9 trillion, by 2030.
Said another way, North America and Asia spent comparably in 2009. By 2030, Asian consumer spending will be six times greater than North American levels. Of course, growth in consumer spending depends in large part on economic growth. That's a mouthful for what it portends about our future relative to China's.
Yes, the world is clearly undergoing tremendous change, and we need to prepare for the future. Maybe even try to tilt it in our favor by making the right decisions now.
This all means that financially we must not allow ourselves to become weak to the point that China achieves military superiority as a result of U.S. profligate spending on big government and elderly entitlements at the expense of our national security.
When we look at things clearly, we see that the real debate isn't about a choice between Democrats protecting elderly entitlements and the Republicans defending low taxes for the wealthy. These are both phony issues when viewed honestly and openly.
Our choices today about tomorrow revolve around four basic factors:
(1) the total and per capita size of our future economic pie relative to China and other countries;
(2) the portion thereof to be set aside for national security and defense purposes;
(3) the portion thereof to be taken by government spending, elderly entitlements and national debt servicing payments (including interest and principal); and
(4) the remainder available for private sector investment and economic "pie" growth.
Number 4, of course, will lead us directly back to number 1. And so on.
According to the above referenced chart, in 2009 we accounted for ~25% of the world's consumer spending. The forecast for 2030 is that the North American consumer will represent ~10% of the total.
Let's hope that we don't lose our ability to remain free, open and an independent self governing society along the way.
The really sad part is the current absence of leadership within either political party. As should be evident to all, the U.S. has fundamental issues to address that will require informed choices by our fellow citizens about the future.
If the future U.S. economic pie is smaller or larger than otherwise, that will have very real consequences. Same with national security, size of government, elderly entitlements, deficits and debt, as well as the extent of entrepreneurial freedom, opportunity and the commitment to free market capitalism.
What a time for the pols to be AWOL! Oh well, the people will just have to carry on without them.
Maybe we'll even decide to get some new pols along the way that aren't afraid to deal with the real issues facing we the people. That would be nice, especially if we made clear that's what we wanted them to do.
Lead, follow or get out of the way, in other words.
Thanks. Bob.
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