Thanks. I had a quick look at the long article. It was very interesting as I learned air of crisis in USA. Please see my comments as below:
ﾂ"If you print money like in Zimbabwe... the purchasing power of money goes down, and the standards of living go down, and eventually, you have a civil war.ﾂ"
This points out "risk of inflation", but where is inflation today in USA ? But you are seeing deflation, arn't you ? After bubble burst, Inflation won't come even in unlimited printing money as everybody is now rushing deleverage.
the Economist proclaims that the promising side of the inevitable de-leveraging of the U.S. economy will be realized as the domestic savings rate soars, and the U.S. learns to ﾂ"export or die.ﾂ"
Partly right as our economy (aka GDP) is composed of 1) Household consumption; 2) Private sector investment; 3) Government expenditure; and 4) Net export/trade surplus. Thus, after bubble burst, the No 3 (government expenditure) is the best & prompt solution to maintain the GDP.
While this lifted exports, it did not achieve a trade surplus. To the contrary, as the dollar depreciated by 35% oil prices escalated by 363% from an average of $27.39 in 2000to $99.65 in 2008, when the U.S. trade deficit stood at almost $700 billion, practically double the 2000 trade deficit of $379.8 billion.
Japan does not produce oil AT ALL. We imports All energy, but we don't see little problem.
Thus USA can overcome the diffuclties ahead. It must be easy. Nothing to worry about.
President Obama launched the National Export Initiative in his State of the Union message of January 2010. The Administration aims to develop a coherent export policy, with a stated goal of doubling US exports in five years. But the proposals announced lack a key component – the need to encourage American companies to send US citizens to sell US goods.
I don't understand well. Why US companies need to send US citizens overseas to sell US goods? Business trip is enough, isn't it? unless US compnaies need to operate factories or similars.
The apparent prosperity anchored in U.S. high value manufacturing, resulted in only about 400,000 more Americans finding employment from December 1999 through December 2009. Meanwhile, the population of the United States grew by about 30 million during that decade. Ouch.
This happens everywhere, not only in USA. We call it "higher productivity". Unlike 1950s - 1970s, we are living in more high-tech world and we are producing more than before with less people as shareholder demanded it or due to global competition.
U.S. citizenship carries more fiscal burdens than that of any other country. U.S. citizens alone, among leading economies, must pay U.S. taxes whether they reside in the U.S. or not....So-called exit taxes, the fiscal equivalent of the Berlin Wall, have been imposed to prevent successful Americans from escaping a lopsided tax burden...
This is beyond my imagination --- "successful Americans aim to escape from USA to avoid tax burden." Just unbelievable. As far as I know, typical Americans are very patriotic, singing "Good Bless America". Majority voted Barak Obamam, who intended to introduce National Health Care System. It was Obvious that National Health Care System will be equivalent of more tax burden, and it was the result of "Democracy", wasn't it? So to me, it sounds like complaints of rish Americans who enjoyed high income as US citizens.
There was a surge of persons leaving the U.S. after the on-set of the Second Great Contraction in December 2007. If, indeed, it amounted to a 67% increase in the number of Americans living outside the U.S., it marks a major inflexion point. For the first time since the depths of the Great Depression in the early 1930s, more persons appear to have left the U.S. than moved in.
I think it was just a result of temporarily worsening job market in the USA.
In my view, after the current surge based on massive bailouts and stimulus is exhausted, the U.S. economy is destined to grow slowly, or not at all. I believe you will look in vain for rapid growth in the U.S. for the next half century as leverage is subtracted from the system.
Agree. As I said, USA and other developed countrues will follow Japan's path - low growth rate + deflationary economy unless we move up to different world via innovation. Developing countries will catch up with USA, Japan and etc. sooner or later because they are NOT stupid. Plus catch-up-speed is faster than before as we live in more high-tech world. So all what we need to do is continuous efforts for innovation, which is only the way to keep developed countries as "developed".
Economic growth, without government spending and private sector's innovation for high end products/service, is only Bubble Economy (aka fake economic growth).
This is an interesting strategy. Probably good strategy for rich Americans for exodus, but again beyond my imagination, but not a solution for US economy, I think.
In addition to the ﾂ"National Debtﾂ" you are also on the hook as a U.S. taxpayer for ﾂ"National Liabilities,ﾂ" including $14.286 trillion for Social Security, $18.901 trillion for Prescription Drugs and a whopping $75.167 trillion for Medicare.
Usually people worry about "Government Debt" as it will be a future tax. But as I said, it will not be future tax in case of Japan and USA.
Japan: Chronic National Account Surplus country + Ageing population + the world's largest creditor nation. In Japan, money is abundant, but people are not interested in spending. Thus government spends money on behalf of us for maintaining GDP. As a result, JGB's 10-year yield is the lowest in the world - about 1% per annum. Plus more 96% of JGB (printed in JPY) is owned by Japanese. This means "Government Debt is Japanese citizens' Assets".
USA: Chronic National Account Deficit country + Growing population + the world's largest debtor nation. US government has increased government spending for the past years to maintain GDP. As a result, UST-bond 10-year yield is arising but lower - about 3-4% per annum - than before-Lehman-shock. Although majority of UST-bonds is owned by foreigners, it is issued in USD, which is your currency. If USA needs to repay it, just print.
In addition, when we had looked at the sovereign bonds history, government debts had NEVER be repaid by tax. What the governments did before was "ROLL-OVER" + "Devaluation via inflation". The past Default countries such as Russia, Argentine, Mexico, etc. are borrowed money in USD (foreign currencies). Because of USD-based bonds, they could not repay the debts when their currencies dropped.
In short, in this planet, Only Japan and USA are possible to survive as a debt-laden country. Do you understand ????