By Cage Innoye
Some are saying that US will have a “W” shaped recovery, that is, an upswing and then another decline. The bitter fact may well be that the “W” will be followed by a “triple U” and then a “quadruple U” and then a “quintuple U” and so on. The US economy is entering a long period of diminishing expectations with fluctuations but no overall substantial growth.
And because of this, it is time for the nation’s citizens to consider a completely different economic system, as this one will not get us out of our long term malaise. The present system of capitalism will only drive us down further.
Why the dismal prognosis? The US has lost its share of world production as other nations have come up quickly in the last 10 years; we are in a far more competitive world.
Much wealth was destroyed by the mortgage and financial crash. The costs of the bailout were enormous. These funds must be paid for by Treasury bond sales, and then eventually higher taxes to pay for the bonds. We have the continuing high costs of wars that cannot be politically, morally or financially justified.
The value of the dollar is declining, 13% to the Euro since the crash. This is the “other shoe dropping”, for as the dollar careens our prestigious Reserve Currency status and all of its advantages will end. US Bonds that nations have been buying will fall in value, as the dollar is worth less. This will lead to demands for higher interest rates on bonds to recoup losses, thus raising general rates in America and leading to inflation. If the dollar becomes too unreliable, nations will look elsewhere to find safe havens of investment. New financial instruments like mixed bonds from many strong economies may appear; these can spread the risk, removing a major source of funds for the US.
The future is grim. But it is not inevitable that we languish in stagnation, we can dig our way out of this hole, however, not with the same people in leadership who got us here in the first place — for as we dig they will supervise and take bonuses while we sweat and stress. We cannot continue with the same system based upon profit, greed, selfishness, corporate monopoly, lobbyists and political corruption.
The first thing to do is consider a new economic system, one that is not capitalism….or socialism either. What is needed are new economic principles and new economic institutions. And then we can have a comeback, one that is solid and not based upon