Post on 05-Dec-2014
description
IS IT THE END OF THE WORLD?
No, this time it is the end of American Hegemony
YES, IT DID GIVE BIRTH TO THE WESTERN HEGEMONY THAT DATES BACK TO THE POST RENAISSANCE PERIOD IN EUROPE
Didn’t We Have a Revolution in The West?
POST-RENAISSANCE PERIOD: SOME DISRUPTIVE BUT
BENEFICIAL DEVELOPMENTS
• Industrial Revolution in Europe • New Technology and Railways• Protestant Movement• Colonial Enterprises• Revolt Against Establishments • Political Liberalization• Adoption of Democratic Values
WHAT BROUGHT ABOUT THE AMERICAN HEGEMONY?
Advanced Production and Process Technology.
Bretton Woods Treaty and the Reserve Currency Status of US Dollar.
Economic Liberalization and International Trade.
Growth of the US Military Machine. Expansion of the US Multinational
Companies. Free Market Capitalism and Growth of
Credit. Individual Freedom to Earn and Spend. Marketing Innovation and Birth of
Consumerism. Revolution in Education
7/20/2014Please read 'Sovereign. Debt Crisis
and Economic Sustainability'
Please read 'Sovereign Debt Crisis and Economic Sustainability'
MATURING AMERICAN HEGEMONIC LIFECYCLE
Post-war Political and Economic Leadership.
Primacy of the US Dollar (BW Treaty). Financial (market) Deregulation and
Innovation. Export of Free Market Capitalism Abroad. Growth of the Housing, Automobile and
Other Service Sectors. Defence-led Economy and Military Exports. European and Japanese Economic
Resurgence .7/20/2014
Please read 'Sovereign Debt Crisis and Economic Sustainability'
WHAT DID THE WEST GAIN?
Employment Opportunity and Income Growth. Enviable Public and Essential Services
Provision. Adequate and Quality Infrastructure
Development. Affordable Housing Provision for the Majority. Public Housing, Free National Health Service,
and State Pension in Europe. Parliamentary Democracy, Independent
Judiciary, and Bill of Rights.
7/20/2014
Please read 'Sovereign Debt Crisis and Economic Sustainability'
WHAT DID THE WEST GAIN? (continued)
Safety Net Such as Unemployment Benefit and Income Support.
State Pension, Medicare, Medicaid, or Free Health Care as in Britain.
Unprecedented Boost to Quality of Life. Free or Affordable Education for All. Growth of Discretionary Income and
Spending Power. Freedom to Choose, Speak and Gather.
7/20/2014
Please read 'Sovereign Debt Crisis and Economic Sustainability'
EMERGING THREAT: CAN THE WEST SUSTAIN THE STATUS QUO? The Goodtime is Over? It Seems Difficult to
Sustain (fifty-fifty chance) the Status Quo. The Prolonged Crisis and Economic Stagnation
is a Real Threat. With all the Textbook Measures Taken, the
Economy is Still Struggling to Regenerate. Free Market Capitalism has Reached its
Saturation Point in the West. Sustaining the Status Quo Requires Innovation
and Restructuring of the Market System itself and How We Generate Wealth in the Economy.
7/20/2014
Please read 'Sovereign Debt Crisis and Economic Sustainability'
IS THE WESTREN LIFESTYLE ITSELF IN DANGER?
End to the Lavish Credit-led Consumerism. Unemployment, Consumer Debt Burden,
and Growth in Personal Bankruptcies. Substandard Public Services Provision. Soaring House Prices, Unaffordable Higher
Education and Crumbling National Health Services.
Crumbling Infrastructure (highways & bridges).
Ageing Population with a Meagre Pension and Uncertain Future in the Horizon.
7/20/2014
Please read 'Sovereign Debt Crisis and Economic Sustainability'
WHAT MUST HAVE GONE WRONG WITH THE NEOLIBERALISM?
Reverse Impact of Globalization (negative impacts). Deregulation Impact of the Financial Sector. High Cost of Labour and Manufacturing Leading to
Outsourcing Production Elsewhere. Adverse Impact of Creative Marketing that
Perpetuates ‘Destroy and Build’ Mentality. Credit-led Over-consumption . Reckless Spending by the State Using Borrowed
Money (31% of total spending in the US is borrowed). Growth of the Military (war) Machine. High Cost of Welfare Budget (including a costly state
pension system).
7/20/2014
Please read 'Sovereign Debt Crisis and Economic Sustainability'
THE WORST IS STILL TO COME
The Hegemonic (economic) Lifecycle Flirts with Decline (downward trend).
The Treasury is Empty (USA, UK, Japan, etc.) Unprecedented Level of Sovereign Debt (almost
100% of the GDP in USA & UK and 230% in Japan). Widening Current Budget Deficits (6%of the GDP). Huge Debt Service Payment Even with Low
Interest Rates (reaches 50% of Revenue in Japan). Widening Gap in the Balance of Trade (deficit). Failing Monetary Policy Measures and Huge QE or
Asset Buying-spree.
7/20/2014
Please read 'Sovereign Debt Crisis and Economic Sustainability'
STATE OF THE ECONOMY AND THE POLICY MEASURES TAKEN
7/20/2014
Zeroing Interest Rates (lowest in history) and Still Being Ineffective.
Obsession with Inflation Targeting. Still High Consumer and Business Lending
Rates. Proliferation of Financial Services Products
and the Lack of Regulatory Oversight. Open and Global Financial System Affecting
the Nation-State Economy. Central Banks Churning out Stimulus
Packages, Including ‘Quantitative Easing’.
Please read 'Sovereign Debt Crisis and Economic Sustainability'
POLITICAL MANOEUVRING OF FISCAL POLICY
High Tax Burden on the Average Wage-Earner. Difficulty in Balancing the Current Budget. High Rates of Value Added Tax in Europe. The Highest Income Tax Rate in EU Countries
Exceed 75%. Complex and Difficult to Comprehend Corporate
Tax Codes (thousands of pages). Corporate Tax Loopholes: Tax Fraud and Evasion
with the Help of Clever Accountants and Lawyers. The US still Boasts One of the Highest
Corporation Tax but Legislative Loopholes Helps Tax Evasion.
7/20/2014
Please read 'Sovereign Debt Crisis and Economic Sustainability'
THE AMERICAN BIG BANG
An American Big Bang? How? There is a Fifty-Fifty Chance the Economy will Collapse Soon.
With the Banking and Sub-prime Bail out, Economists Estimate the Real US Public Debt to be $25 T (not $17.5 Trillions). With Unpaid Obligations, it Can Reach $80 Trillions by 2040.
Banks Have Written Off Over $2 Trillions as Unrecoverable Since the Banking Crisis.
The Federal Reserve’s ‘Quantitative Easing’ or Printing Money has exceeded $4 Trillion So far.
7/20/2014
Please read 'Sovereign Debt Crisis and Economic Sustainability'
THE BIG BANG (continued)
The US Government Spending was $3.5 T in 2013 With a Current Deficit of $642 Billions.
As the Economy Stagnates, it Can Reach $1 T Again Before 2020 (Deficit was $1.1 T in 2012).
31% of all US Gov Spending was Borrowed. The US Spends 15% of the GDP on Mandatory
Expenditure (Medicare, Social Security, Interest Payment), a Staggering $1.5 Trillions in 2012.
The US Trade Deficit is also Hovering Around Half a Trillion Dollar a Year.
7/20/2014
Please read 'Sovereign Debt Crisis and Economic Sustainability'
WHAT CAN CAUSE THE ECONOMY TO COLLAPSE
Slowly Declining Value of Dollar (real worth of $1= 3.5 cents). Other currencies are slowly replacing the dollar as the currency for international payments and China has concluded currency(Renimbi) exchange treaties with several leading economies.
Sudden Collapse in the Value of Dollar-Dominated Assets Along with the Crashing of Dow Jones index.
Unsustainable Level of US Sovereign Debt leading to defaulting on Interest Payment.
Depreciating Value of the Corporate Equity Leading to Defaulting the Debt Payments.
7/20/2014
Please read 'Sovereign Debt Crisis and Economic Sustainability'
THE BIG QUESTION: IS THERE A WAY OUT?
Fortunately, the Answer is Big Yes, but How? There is an Innovative but Unorthodox Way to
Generate Public Revenue without Recourse to Further Borrowing or Taxing the Already Burdened Taxpayers.
Consider the Economy as a Virtual Company and Commoditize the Economic Potentials to Create National Equity to be Sold in the Share Market. Make the Taxpayer an Investor.
Even the Foreign Investors would Love to Hold US Inc. Share Rather than Treasury Bills.
7/20/2014
Please read 'Sovereign Debt Crisis and Economic Sustainability'
NEED TO KNOW MORE?Check with AMAZON
7/20/2014