They all said that, the real problem is short term thinking. This short term thinking of government of "this year or this four years" is what has temporarily ruined America. Even if you look at politicians now they aren't addressing "ANY" real problems, just putting each other down. There is a reason for this. If they dealt with the real problems, they couldn't be elected. Because just like France now, entitlements like Social Security and other retirement entitlements, Medicare, The military(like England), would all have to be cut about 10% or more considering the lack of taxes presently available given the present tax rates upon the citizenry. And just like France, even if the politicians did that, there would be rioting in the streets in the U.S. But without those cuts our children and grandchildren WILL live in a Third World America.
The other thing that needs to happen is to stop forcing people out of their homes nationwide. Things have no chance of getting back to normal if this "never ending cycle of foreclosure" continues. So, keeping people in their homes by joining together as a nation to support each other is another change that needs to happen.
But now I would like to go back to around 1970 when I believe the original problems began. If you remember back then or have studied that time you see the Viet Nam War and a worldwide social revolution that began in the U.S. through college students and traveled then through Europe and around the world. Even though this social revolution was absolutely necessary to avoid a nuclear war between The U.S. and Europe against the Soviet Union and China, it must be understood that this change also prevented addressing the real economic problems of the U.S. and Europe. So, even though the U.S. , Europe and the world survived by preventing a worldwide nuclear holocaust it also sowed the seeds of not dealing properly with real economic problems as the world changed at that time.
Meanwhile, when Nixon and Kissinger went to China in the 1970s, they began a relationship with China with the U.S. and Europe, that although it prevented a nuclear war with China and started it's relationship with the western world in a diplomatic and economic sense, it also sowed the seeds of the U.S. economic downfall. Now, the argument could be made that no nation stay on top forever. This is true. And it is also true that the U.S. was on top during the 1950s and 1960s literally because we were the last big nation on earth not completely devastated by World War II. So, we were on top economically by default. In other words because war didn't come into mainland U.S. our infrastructure hadn't been destroyed like the rest of the developed world had.
But by 1970, the rest of the world had rebuilt itself. Both Germany and Japan had rebuilt by 1970 and their economies were rolling forward. Also, by 1970, South Korea's economy was rolling as well. And the same with China and Russia. So, at this point we had some competition. Then something else happened- OPEC, the Middle East Oil Cartel. So when they doubled or tripled the price of oil and kept it there with the Arab Oil Embargo in 1973 there was not enough oil in the U.S. for it to function properly. This began the siphoning off of American Business profits. It has stayed this way ever since. It has had the effect of strangling the U.S. ever since by siphoning too much profit away from the U.S. for the U.S to continue to do well. The same is true of Europe and Japan and many other nations.
This directly created a recession from 1973 to 1975 in the U.S.
(see http://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States)
It along with debts piling up from the Viet Nam War also created the 1980 recession (six months) and the early 1980s recession of 1 year and 6 months from July 1981 to November 1982
| 1980 recession | Jan–July 1980 | 6 months | 4 years 10 months | 7.8% (July 1980) | −2.2% | The NBER considers a short recession to have occurred in 1980, followed by a short period of growth and then a deep recession. Unemployment remained relatively elevated in between recessions. The recession began as the Federal Reserve, under Paul Volcker raised interest rates dramatically to fight the inflation of the 1970s. The early '80s are sometimes referred to as a "double-dip" or "W-shaped" recession.[30][40] |
| Early 1980s recession | July 1981 – Nov 1982 | 1 year 4 months | 1 year | 10.8% (Nov 1982) | −2.7% | The Iranian Revolution sharply increased the price of oil around the world in 1979, causing the 1979 energy crisis. This was caused by the new regime in power in Iran, which exported oil at inconsistent intervals and at a lower volume, forcing prices up. Tight monetary policy in the United States to control inflation led to another recession. The changes were made largely because of inflation carried over from the previous decade because of the 1973 oil crisis and the 1979 energy crisis.[41][42] |
Both the above quotes regarding the 1980 recession and the early 1980s recession are from wikipedia.
So, we see here that the Viet Nam War, and OPEC, the Iranian revolution and Tight monetary policy then all led to almost 10% unemployment just like now. For me, as a 32 year old in 1980 with a wife and 3 kids, I was forced by circumstances to sink my savings into inexpensive but beautiful forest mountain property and building an A-Frame inexpensively to be able to live without rent or utilities for 5 years so I could make it through this time relatively unscathed. Many many others weren't as lucky as I and my family.
But still, the basic problems of a completely changing world economy were not properly addressed. And so these problems built and built to where we are now and these problems still are not being addressed because the average person in the U.S. does not either understand the problems or they don't want to see riots in the streets like France in response to what must be done here as well. We can no longer pretend we are a rich country like we were from the 1950s through the 1970s. Those times are gone. And until we find another way forward we must reduce entitlements at a Federal and state level by at least 10% or more just like France and England are doing now or things are just going to get worse and worse ongoing. If this isn't done we will live in a Third World Country soon, where there is ONLY rich and poor and nothing else. If that happens God Help Us!
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