The US government has been spending too much money and is thus highly indebted. IMHO, there is just too much money spent on defence. Defence budget is $600 billion. Actual defence related expenditure is actually much higher, at around $1100 billion!. The army generals, the corrupted congressmen and the military industralists will fight tooth and nail against any significant budget cut on the military budget. Thus the proposed budget cuts will hit hard on the poorer and more vulnerable section of US society.
The famous investor Jim Rogers has this to say regarding the debt ceiling deadlock:
“It’s a charade. It’s a scam. They’re not going to do anything serious. They’re going to announce something either the day before, the day of or the day after and they’re going to say everything is okay.They are going to continue to spend and drive us deeper into debt. I don’t see any chance of turning it around.”
“They’re trying to get publicity for themselves “We are all going to continue to get deeper and deeper into debt. You think that problems are bad now, you wait until we don’t have any more credit. There will be social unrest as interest rates and inflation will go through the roof. Prepare for another lost decade or more.”
“Even if they default on August 2, 3, 4 — they’ll be back playing the same old games.”
Following article explains the debt crisis problem facing US, and the complacency of people in regards to their political system that led to country to live beyond its mean and engage in meaningless and costly military engagements overseas.
By Han Dongping (chinadaily.com.cn)
As many people have predicted, the United States congressional leaders and Obama administration have reached an agreement to deal with the US debt crises in order to avoid a US default.
The immediate danger of default will definitely be avoided this time, as in the past. But the US is still faced with long term financial difficulties with its large national debt and mounting deficit. US government and US citizens must learn to balance its budgets. More importantly, US government and US citizens must learn to live with less.
The US government accumulated such a big national debt largely because its military adventures overseas. For decades, the US government has assumed the responsibility of self-appointed world policemen. It has used its military superiority in the world in a very arbitrary manner. It wants to make the whole world in its own image. Past US military intervention in Korea, Vietnam and elsewhere caused huge humanitarian and environmental disasters in the world. More recent US military adventures in Kosovo, Yugoslavia, Iraq, Afghanistan and Libya have also caused tremendous distresses to the people and environment in these countries.
The US people also paid huge prices for their leaders’ wrong-headed decisions. Hundreds of thousands of US servicemen lost lives and limbs in action. The financial burdens these military adventures placed on the US people will be apparent as the US Congress acts to cut domestic spending on Medicare, education, transportation, welfare and so on.
Last Sunday, an old lady talked with me while I was swimming in the pool. She commented what a disgrace the US government’s debate over the debt crises was. I told her that we could not just blame Congress or the Obama administration for what was happening. They deserve what they got in the end.
For decades, US people have been complacent about their government system. They took pride in their democratic system, and allowed their government to do many dubious things in their name without serious scrutiny. The debt crisis is only the starting point of reckoning about US complacency in the past. The US military adventures overseas do not just affect people in the developing world after all. It will come home to haunt US people in the end as well.
One of my students who worked on campus this summer saw me this morning. She told me that she was very upset watching last night’s news about congressional leaders’ agreement to cut over two trillion dollars of domestic spending in the next ten years. Her grandmother’s welfare would be cut, and her own medical insurance would be affected and so on. She asked me if the time for her to leave the country had come. I told her that the US people would learn an important lesson from these crises. They would learn that US foreign policy does not just affect other countries. They will have to educate themselves about what is going on in the world, and what role the US government is playing in world politics.
Why should US tax payer’s money be used to enforce regime changes of other countries, like in Iraq, Afghanistan and, now, Libya? Why should US service men be placed in harm’s way to accomplish these kind of missions? Why should the US have military bases all over the world? Do these military bases enhance US national security or endanger US security?
If more US citizens wake up from their complacency as a result of the current debt and financial crises, and if more US citizens begin to educate themselves about US foreign and defense policies, and ask more questions of their government leaders, then the current debt and financial crises will turn out to be a good thing. A better future will be possible in the end.
The Chinese elite and Chinese people can learn some important lessons from what is unfolding in American politics as well.
For decades, many Chinese elite have been accustomed to using the US as the standard for their own policies and practices in China. They often forget that China and the US have very different histories, cultures and natural environments. China can not simply use US practice as justification for doing the same thing in China. What is good for the US may not be good for China, and vice versa.
China should always design its policies based on the Chinese reality. The most important lesson is that China should not buy any more US treasure bonds. Instead of financing US overspending, China should use the money to advance the welfare of the Chinese people.
Han Dongping is Professor of History and Political Science at Warren Wilson College, NC.