America is losing the economic war to China
Nevada Appeal Internet Editor
Here’s a news flash. America is in serious debt.
There was a new warning of this problem last week when Congress increased the debt limit to $9 trillion dollars. And with the budget the Senate passed the same day, it will not take long before they are increasing that limit again.
We are addicted to debt.
While politicians will argue that we have to run deficits during wartime, they are paying attention to the wrong war.
We all look at Iraq and terrorism as “The War.” But in a sense, these are sideshows to the real war, just like Vietnam was to the Cold War.
The battlefield now is economic. Perhaps it always was, at least since nuclear weapons made all-out war suicidal.
The Soviet Union was defeated in the Cold War by economics, forced into an arms race its economy couldn’t win. It also found itself bogged down occupying Afghanistan, which bled it of money and power. Eventually, Eastern Europe broke free and the party was over, without one nuke being fired in anger.
And now America finds itself losing ground to China – the newest superpower – while bogged down in our own occupation battle in the Middle East that bleeds our treasury, power and influence.
The massive debts we are running up are being financed partly by China, which is also experiencing staggering economic growth. Over the last five years, China’s Gross Domestic Product (GDP) has grown an average of 9.5 percent per year, more than three times the growth of the U.S. economy. It’s predicted to grow by 7.5 percent a year for the rest of the decade.
As they keep growing and we keep borrowing, our position becomes weaker. We are on an unsustainable economic path that ends in a brick wall. And China is set to pick up the pieces, just like we did with the Soviet Union.
This new round of deficit news will send Democrats out to criticize tax cuts for the rich, with the Republicans crying class warfare.
And they are all missing the real threat. It’s not about rich and poor. It’s national security, stupid.
We simply can’t continue on this path. We can’t get something for nothing. Those tax cuts have a real cost. They are helping us lose the war.
You have to make sacrifices in wartime. These tax cuts come at the top of the list of the things we need to get rid of if we are going to prevail.
Tax cuts are only part of the problem, but they are the easiest to fix. Long term, we have to do something about energy. That is the basic reason why our military is in the Middle East. We can’t continue to send hundreds of billions of dollars out of the country just so we can drive our cars and boot up our computers. And beyond the money we spend on oil, we also have to figure in the cost of keeping those oil supplies secure, which we pay for in dollars and the lives of our soldiers.
And as China’s economy grows, so does its thirst for oil. They have the cash to buy it. We don’t.
Exploring alternative energy sources has to be more than just campaign rhetoric in an election year. It should be our number one priority. Finding better sources of energy is not only key to our success, but to our very survival. This will require major investments in research and technology, with comparative attention paid to our educational infrastructure as well.
Budget deficits aren’t exciting. They are abstract. The dollar amounts just don’t register. The personal impact isn’t realized.
That’s how we have allowed our political leaders to run up such massive debts without consequence, irresponsibly cutting taxes while increasing spending. Economic decisions are being made for political reasons, buying votes for the next election.
We have been fooled by this gambit. We have come to expect something for nothing, like those furniture store ads that proclaim nothing down, and no payments until next year.
Well, next year is here, and the bill is due. We can either start making payments now, or wait for China to repossess our assets.
• Kirk Caraway is Internet editor of the Nevada Appeal. Write to him at email@example.com, or comment online at nevadaappeal.com.