What we need to do to survive as an economic power

It has been said that the twentieth century was the century of America and the twenty first will be the century of China. Events occurring now and policies undertaken by the government of China seem only to reinforce that statement. I believe that policies undertaken, and actions left undone, by our government are perhaps more influential in that outcome than anything done by the Chinese.

In the following essay I will lay out the things I believe need to be done to ensure that the above prophecy does not come to fruition.

1) Stop being the worlds policeman

The United States maintains a military presence all over the world on 865 bases (not including bases in Iraq and Afghanistan) at tremendous expense. $130 Billion in the Fiscal 2010 budget alone. The United States represents 46.5% of the worlds military spending, next highest is China with 6.6%.
Let the Europeans, The Saudi's and the Japanese take over their own defense or pay for us to do it. World war two ended sixty five years ago and the cold war more than twenty years ago. If we really need bases in those areas put them in places where we can save money and support countries who more desperately need it. Vietnam instead of Japan, Qatar instead of Saudi Arabia.

2) End the "War on Drugs"

$1trillion dollars since 1960 and we have achieved nothing. Our prisons are so full of non violent drug offenders we can't afford to run them. It's choking our criminal justice system, and puts financial pressure on law enforcement and border patrol agencies. Treat drug addiction and abuse as a public health matter rather than a criminal manner. I believe the folks at Law Enforcement Against Prohibition have the right idea on this.

3) End the Wars in Iraq and Afghanistan

Sorry but we cannot afford them. Never mind they have achieved none of their stated goals, nor are they likely to do so, those countries will never return a dime to us. We were promised the Iraq war would pay for itself. Ten years later and not a drop of oil money has come to us and the country has four hours of electricity a day.

4) Fight back against the Chinese, while we still can

They are waging a trade war against us, using unfair trade practices, and stealing our technology. They bitch slap us and we say Shay Shay (thank you in Mandarin) sir may we have another. Donald Trump railed on this on Fox Business News with Neil Cavuto this week and he's right, our companies are unfairly treated in China, and we give them most favored nation status. It's disgraceful and it's bankrupting us. Mr. Trump says a fair trade and business environment with the PRC would eliminate the deficit and he's right. The Chinese government is an oligarchy and if we do not stand up to their brutish behavior now, like a schoolhouse bully they will only get more brazen in their actions.

5) Eliminate the Tax exempt status for religious entities

Let them set up 501(C)3 corps to fund charitable activities but it is not up to the rest of us to subsidize the construction of Temples, Mosques, Churches, Tabernacles, etc. and frankly we can no longer afford to, Every time you see a televangelist with a $2500 Suit and $10k watch remember you paid for 1/3 of it.

6) Establish a sensible Energy Policy

We cannot afford to continue to send so much money overseas for oil, a resource that is probably dwindling ( I believe it is but I'll say probably in deference to Peak Oil deniers) and that is subject to increased competition for it. Forget the fact that a good percentage of the money is going to our enemies, increasing the amount we have to spend on defense, their is little argument that we pay too much for it and it'll only get more costly as time goes by.

We have to cast aside the old paradigms and 20th century thinking if we are to maintain our status as the world economic leader. Failure to do so is a recipe for disaster.

Obstacles

The Congress, The Executive Branch, and the two parties that dominate our political landscape.

We need our elected officials to be forward thinkers, and they seem unable to think past the next election. Pandering to a lowest common denominator constituency in a ten second soundbite manner disallows true discourse. The two parties look at one another as enemies and interact with vitriol and divisiveness. Gone is the patriotic dissenter, the visionary, the cream of the crop the Founding Fathers were, and in their place the Career Politician, partisan hack, and special interest lackey. History will no doubt look back on this era as one of two things, the time when we rose above our differences and united in the honorable endeavor to sustain the dreams of our antecedents, or the time when we ceded the banner of leadership to others and fell into mediocrity. Sadly it is quite difficult to muster much confidence in the current crop of politicians, and I am not too sanguine on the likelihood of the general public to overcome the pervasive inertia and rise to the first of those two scenarios.

Us

We as a people must demand of our elected officials, our businesses, and our civic leaders, behavior that exemplifies the characteristics that made this country great. Hard Work, the ability to make hard choices for the benefit of our nation, fairness, and high moral standards. We must be willing to make the sacrifices that demand will require of us. We cannot accept lip service, mendacity, or foolish games. Our heritage and the well being of our children is at stake.

Whether you are a seasoned pro or a paper trader there is value in speaking to other traders. That statement needs no caveat, in fact I believe it to be an axiom.

What some folks may not be aware of, and in fact has never ceased to amaze me, is the number of people who participate in the discourse. Those who know me are aware that I participate in StockTwits. An amazing number of traders, many of whom are professional traders and money managers, generously offer the benefits of their experience there every day. Of those who would ask why a pro would offer this experience with no personal gain, let me answer from my own opinion. It feels good. Those of us who have survived in this game for any length of time share a commonality of passion for it. In the same way it feels better to watch a ballgame with a group of people, participating in a social group of others who share that passion, feels good. I love the fact that a trader on the other side of a trade will take my lunch money without reservation and then share a beer after market close and discuss it in a collegial manner.

My participation in the discourse has made me better at what I do, which is my goal in all things. It has allowed me to dialogue with others of both like mind and opposing minds alike. It has helped me to adapt to a changing market environment by constantly exposing me to different viewpoints, and methodologies. And perhaps most importantly has given me the opportunity to establish contacts and friendships with a great many people.

So, Join the party. Learn, Teach, Share the Passion. You won't find a better value anywhere.

SMB Capital Website