[andyt]

http://www2.macleans.ca/2010/09/14/third-world-america/

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Collapsing bridges, street lights turned off, cuts to basic services: the decline of a superpower

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Welcome to the ground level of America’s economic crisis. The U.S. unemployment rate is 9.5 per cent. One in 10 homeowners are behind on their mortgage payments. Home sales are at record lows. While the economy has been growing for several quarters, the growth is anemic—only 1.6 per cent in the second quarter of this year—and producing few new jobs.

Even with interest rates at unprecedented lows, there is anxiety about the possibility of a double-dip recession. Sales of existing homes are at their lowest level in 15 years, and new home sales plummeted this summer to the lowest levels on record. Property and sales tax revenues have shrunk. And nowhere is this more apparent than at the local government level, where officials are being forced to roll back the everyday hallmarks of modern civilization.

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Despite its position as the world’s unrivalled superpower, international comparisons show the U.S. slipping on a number of fronts. On education, the United States has been falling behind, in everything from science and engineering to basic literacy. The U.S. once had the world’s highest proportion of young adults with post-secondary degrees; now it ranks 12th, according to the College Board, an association of education institutions. (Canada is now number one.) In 2001, the U.S. ranked fourth in the world in per capita broadband Internet use; it now ranks 15th out of 30 nations, according to the Organisation for Economic Co-operation and Development. “We have been involved for three decades now in paring back public commitments and public spending, and that started with the Reagan revolution. We are living with the outcomes and consequences,” says Michael Bernstein, an economic historian at Tulane University in New Orleans.

Meanwhile, prolonged rates of high unemployment are taking a toll on families today, and will for years to come. Studies have shown that the longer a person is unemployed, the more difficult it is to find a job—partly because skills deteriorate, and partly because employers become suspicious of why someone hasn’t worked for a year. “The United States is expanding its underclass of a whole group of individuals who will become less employable, less integrated, more subject to criminal and other deviant behaviour—and probably become part of the larger problem of structural poverty in America as well,” says Sherle Shenninger, director of the economic growth program at the New America Foundation, a Washington think tank.

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Arianna Huffington sees an even starker big picture emerging from the reams of bad economic news. “As we watch the middle class crumbling, for me this is a major indication that we are turning into a Third World country,” said Huffington, founder of the Huffington Post, in an interview. “The distinguishing characteristic of the Third World country is you have the people at the top and the rest—you don’t have a thriving middle class,” says Huffington, whose new book is entitled Third World America: How Our Politicians Are Abandoning the Middle Class and Betraying the American Dream.

America is moving “from the Jetsons to the Flintstones,” she argues. “The American dream was already based on the idea you could work hard and do well and your children will do better. Now we are confronted with downward mobility across the board. You have the phenomenon of unprecedented numbers of college grads who can’t get jobs.” The current public sector cutbacks in education and infrastructure will only make things worse, Huffington says. “You are both hurting people in the present, and basically undercutting your economic growth and prosperity in the future.”

[Thanos]

It's horrible to have to see a good and decent friend in so much terrible pain. But until there's a massive change of heart and a complete rebuilding of the dominant economic thought-patterns down there any return to stability and growth will be so slow that it'll appear to be non-existant.

[FieryVulpine]

This is hardly surprising, I have a friend living in Detroit who describes it as "a little of the the third world in your backyard."

[stratos]

One of the solutions I have come up with for the economic problems is to stop all forigen aid. The money we give to others we could use here at home.

[CommanderSock]

stratos stratos:

One of the solutions I have come up with for the economic problems is to stop all forigen aid. The money we give to others we could use here at home.

I agree 100%. But it requires strong political will. When we cut off foreign aid, we risk losing foreign puppet governments to regional nationalists, who may not be so open to trading with us.

However aid being given to is peanuts compared to some other balance sheet items.

More importantly, that 800 billion military budget needs a slashing. Personal income taxes for the rich need to be increased, but business corporate taxes decreased.

[bootlegga]

CommanderSock CommanderSock:

stratos stratos:

One of the solutions I have come up with for the economic problems is to stop all forigen aid. The money we give to others we could use here at home.

I agree 100%. But it requires strong political will. When we cut off foreign aid, we risk losing foreign puppet governments to regional nationalists, who may not be so open to trading with us.

However aid being given to is peanuts compared to some other balance sheet items.

More importantly, that 800 billion military budget needs a slashing. Personal income taxes for the rich need to be increased, but business corporate taxes decreased.

Yeah, it's amazing what even $100 billion of that defence spending could accomplish. That could create a helluva lot of jobs, be it for teachers, police officers, fireman, whatever.

I understand America's need to remain the dominant military power on the planet, but without the economy to support it, it risks the precarious situation the Soviet Union had before it collapsed - spending more on the military than the economy could support.

While this commercial talks about feeding hungry children in poor countries, it makes the same basic point...

[andyt]

stratos stratos:

One of the solutions I have come up with for the economic problems is to stop all forigen aid. The money we give to others we could use here at home.

Foreign aid is a drop in the bucket. And as the article makes clear, the biggest problem is on the municipal level. I can't see vast transfers of federal money to the cities when the feds are so broke themselves.

And then there's this:

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Prestowitz accuses successive American administrations of sacrificing trade issues to geopolitics. “The highest priority for the U.S. government is national security. We need a base somewhere or a vote at the UN, and we make an economic concession,” he says. Exhibit A: “The Obama administration has bent over backwards to avoid calling China a currency manipulator,” he noted.

Huffington blames politicians’ domestic economic policies: first, Republicans for tax cuts and deregulation that favoured top earners and corporations, and now Democrats for failing to undo the damage. As a candidate, Barack Obama accused George W. Bush of ignoring the middle class, she notes. But now Huffington criticizes Obama for campaigning on prioritizing the middle class and then failing to do so in the White House. “What happened is he picked an economic team whose primary focus has been Wall Street and who dramatically underestimated the depth of the crisis,” she says. “The emphasis has been on fixing Wall Street, which was bailed out without any strings attached, and which turned around and cut lending instead of lend more.”

Shenninger points in part to foreign policy: waging expensive wars overseas rather than spending the money at home. “Our priorities are horribly distorted,” he says. “We spent billions on new energy plants in Iraq and most of the money got siphoned off. We are spending billions of dollars trying to build schools in Afghanistan. But we are not willing to borrow at historically low rates to keep teachers at work or improve public infrastructure at home.”

[martin14]

cutting the military and giving even more space to for China and Russia
to run around isnt the answer, though I'll bet Obomba will do it,
again too easy to sacrifice for short term gain.

We all did that in the 30's, as some of you have forgot.


Borrowing money to pay teachers isnt the answer.


The article shows 10% behind on the mortgage, but not current levels
of short term C/C debt, just waiting for that.

Also waiting for the bills from Obombacare to come rolling in,
they should help things... not.


Might want to hang on folks, that show isnt over yet..

[andyt]

martin14 martin14:

cutting the military and giving even more space to for China and Russia
to run around isnt the answer, though I'll bet Obomba will do it,
again too easy to sacrifice for short term gain.

So what is the answer, oh wise one? The quote was actually about fighting expensive wars overseas, for no conceivable gain, and then spending billions to build up their infrastructure (most of which gets siphoned off to corruption) while Americans go begging.

Actually, as my discussion with Pseudo showed, if the US adopted a Canadian style healthcare system it would save enough money to fund the military outright.

[Zipperfish]

Hmmm--seems a ripe time for us to invade.

[andyt]

Zipperfish Zipperfish:

Hmmm--seems a ripe time for us to invade.

More like find some life preservers and hope we don't get sucked down when she sinks. Or did mythbusters disprove that?

[CommanderSock]

Does America's future look like that of South Africa or Brazil, but instead of race based apartheid, a classist one?

Major cities, with gleaming skyscrapers, punctuated by slums which will house the millions of poor and wretched peasants on the outskirts?

These are interesting times.

Martin - Military expenditure is usually based on a percent of overall GDP of the nation. If the USA keeps increasing military expenditure more than the growth of it's GDP, it doesn't take an economist to figure out the military budget will become needlessly bloated.

Russia, don't make me laugh. When has Russian done anything? They can't even keep Chechen rebels within their own borders in check. Russia is done. Once they get rid of their nukes, they'll be just another European country awaiting demographic disaster.

China, it's inevitable for them to become the head honcho. But that's simply the numbers game. A big country, big GDP, big military.

[PublicAnimalNo9]

FieryVulpine FieryVulpine:

This is hardly surprising, I have a friend living in Detroit who describes it as "a little of the the third world in your backyard."

Well, in all fairness, Detroit's been like that for about 40 years now

[andyt]

It's an NRA wet dream:

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But where does that leave people like the good citizens of Ashtabula County, Ohio? How can they be safe from criminals without a fully staffed local police force, TV station WKYC asked a local judge in April. “Arm yourselves,” came the reply from Ashtabula County Common Pleas Judge Alfred Mackey. “Be very careful, be vigilant, get in touch with your neighbors, because we’re going to have to look after each other.”

And so they did. In July, a group of farmers removed the safeties from their shotgun triggers and surrounded a trailer in which a suspected house robber was hiding while they waited for the county’s last, lone squad car to arrive.

[bootlegga]

martin14 martin14:

cutting the military and giving even more space to for China and Russia
to run around isnt the answer, though I'll bet Obomba will do it,
again too easy to sacrifice for short term gain.

We all did that in the 30's, as some of you have forgot.

Why does the DOD budget have to be larger than the next ten nations combined? I'm sure if it was larger than just the top 5 or 6 'competitors' (UK, France, Germany, Japan, China and Russia), it would still be plenty large enough to handle threats to its security.

No one is saying cut the entire budget (or even a large portion, just 5-15%) - for example, lop off $100 billion from the current near $800 billion total. There are plenty of people that money could benefit besides defence contractors.