US is doomed…or is it?
In the 1980s the Japanese manufacturing might was hurting the Americans. Clearly US ‘experts’ were talking about how all the manufacturing will now be Japanese. Everybody ‘knew’ that the 1990s will be the decade of the Japan. American cars were useless, American watches were too expensive, – anything that America could, Japan could do better. American speech makers said “If there is a change of leadership from US to Japan, let it happen smoothly”. One reader in TIME magazine said ” Not far away from now, I will say, here is a dollar, give me a Yen!!
However 1990s turned out to be one lousy decade for Japan! There was no Japan decade. The next set of Japanese kids did not work as hard as their parents perhaps? Now we are hearing stories of Chinese and Indian boom – rest assured children born to ‘relaxed and rich’ Indian parents are not likely to work as hard as the earlier generation. Corruption is worse than cancer in both the countries – our PSUs are sucked dry by the politicians running it. Many of our so called private sector ‘Industrialists’ are busy squandering the money. Well established brands in India are all American, Korean, Jap, – as much as they are Indian.
So the celebration may be just premature. We have no clue how many girl children are killed. We know that there is a 24 million ‘surplus’ male population vs. female population in China. China cannot have democracy. It takes 5 minutes to read the newspaper in Singapore – that is how State Censorship works!
So let us plan like we will grow at 9% per annum, but we should be prepared for a lower growth rate, and a nice slowdown – call it by any name you wish to!
Srinivas Muthadi
Now Indians are being encouraged to consume more and more. Most of it imported. Indian economy is doomed to meet the same fate as that of US. Example : Every new car that comes on to road is making India more dependent on imported oil. I read in a report that 90% of Americans commute by car to office. Public transport seems to have been buried nicely. Any oil crisis makes them loose their sleep.
I see industry people happy about growth of personal car sector. Is it a success or failure over long term?
Dr Mohammed Ali Khan
US has 3 major advantages
1. Great infrastructure
2. Size
3. Young and growing population ( by immigration mainly )
4. Highly educated and entrepreneurial population
5. Good governance
6. Respect for the rule of law
7. Powerful military
8. Capitalism
The last one is a major factor..
As a rule of thumb, we can say that the more ‘Socialist’ or ‘ communist’ a country the worse it will be economically. Why? because in these countries politicians will interfere in the economy in the name of the “people” and thus disrupt the delicate signals ( like price signals ) by which an economy functions efficiently. Also, politicians and governments are the most inefficient allocators of resources.
The opposite is also true. the more capitalistic and free-market oriented a government is, the more the economy gets richer.
Take agriculture in India, for example. The Government wants to keep the food prices low to satisfy a vocal urban population and farmers are made to pay the price. Agriculture, hence, is not profitable in India. If it not profitable the necessary investment will not come. This is one of the crucial reasons why agriculture is suffering in India.
So, one reason why US may collapse will be…if it moves more towards socialism, but I think a groundswell of opinion is building up in America against the increasing socialist policies of the government there.
In the book ” The Ultimate Resource” Prof. Julian Lincoln Simon argues that the greatest resource is not oil or coal or gold or any material thing. The greatest resource is Human Creativity. A socialist or communist government will cripple this human creativity and ingenuity. A capitalistic free-market oriented government will foster these attributes.