Three strikes and we're out

Strike one. We in the United States are no longer competitive. Other countries like China and India now have talent equal to or exceeding that of the U.S. Their salaries are lower so they not only can design new things, they can manufacture them and ship them around the world cheaper than we can. Countries like South Korea produce better cars, and have overcome giants like Microsoft and Apple to produce superior electronics. Brazil has a superior energy policy than the US. Yet on a personal level we spend and live as if we are still at the top of the heap. Jobs have moved overseas and other than a few token changes our job pool will continue to shrink.

Quite a few years ago the US was declared to be a service economy, meaning we were moving out of manufacturing. But manufacturing, and selling offshore is the only way to grow an economy. It is necessary to bring money in from other countries to grow. Service economies simply move money around, there is no growth. If you're not growing, your shrinking and that is what is happening here.

This isn't all bad, it is a natural flow of things. It's just that in order to correct the situation the salaries of other countries have to increase, and the salaries in the US have to decrease sufficiently for there to be some level of balance. As long as the trade defect is negative our standard of living must shrink. But we hold on as if things can go on forever.

We must stress education so we generate the talent and then experience to once again become competitive, all during a period of a downturn in the standard of living in the US. There is no way around this mess. We have to live through it and it is going to take decades to swing the pendulum. Unfortunately that pendulum is still swinging away from us.

The economic crash of 2007-08 could have been a wake up sign. Instead we hold onto high salaries that companies can no longer afford to pay. Unions push companies for higher salaries, inefficient work force structures, and benefits that are dooming industry. When the government should have spent stimulus money on things that would have helped turn industry around it was spent on maintenance of the status quo. Stimulus money went to prop up the social system, to pay the unemployed which held them in limbo hoping for good paying jobs. 

Strike Two. Liberals are wrong and they are in control of the country. We've just appointed President Obama to four more years so things are going to get worse. Conditions are such today that there is no hope. Nobody can correct this down turn but a liberal approach is the surest way to cause a breakdown. It's not that it will happen. It has already happened.

There is no denying that some people need help. There are needy people in this world and it is simply a fact that some of them will have to be taken care of. But the window is open far too wide and it is sinking the country. Way too many people are taking advantage of a widespread system of entitlements. As the job pool shrinks due to Strike One conditions, there simply isn't the money required to support the millions on food stamps, disability, welfare, and unemployment, not to mention Social Security, Medicare, and the new Obamacare. As the federal government takes in money, spends some of it to support the bureaucracies to dole out money a smaller and smaller portion reaches those who need it. As the government grows it robs the economy of working dollars to advance the country.

Trillions of dollars have been added to the federal debt during this down turn. It was not spent wisely so there will not be the dollars flowing into the government to repay it, nor to sustain the expenditures already in place; forget the new demands that will be generated by Obamacare.

Corporate tax rates are rapidly steeling jobs from the US. Companies are either moving jobs overseas to avoid the high taxes, or they are not growing within the US to generate new jobs. Obamacare is adding to corporate burdens further stifling the economy.

Strike three. There is a sufficient mass of people who have bought into the lie that taxing corporations and the rich is right, mostly because they are dependent on the government to support them. This mass of ill informed people will continue to vote into law policies that benefit them with no regard to the fact that those laws are destroying the country.

We're out. I see no way to avoid a massive adjustment of the standard of living in the united states due to these three strikes. A few paths to the future come to mind.

The best outcome would be the cost of living would decrease through a depression. Some of that is already happening. Home prices are quite depressed which is lowering the cost of housing. Unfortunately home values have not dropped sufficiently and they have already shown signs of turning up. This unfortunately is temporary. As the job market won't really improve, taxes will be higher, inflation could possibly rear it's ugly head, home prices will once again have to fall. The federal government, who invented tax deductions for home mortgage interest, may remove the mortgage interest deduction which will further lower home values.

Salaries could drop and in many cases they have. As the federal government continues to extend unemployment benefits though it removes incentives for people to take lower paying jobs like picking crops. As people can't find any work they are already willing to take anything they can which is helping reduce the average salary which is necessary for the US to become competitive again.

But unions continue to push for higher salaries and benefits which delays the needed salary reduction. Unions once were necessary to protect workers from companies but they have now become an illness holding companies to salary and benefit packages that are destroying jobs.

If the cost of living, standard of living, tax rates, government spending, can all drop at a manageable rate to create a "soft landing" there is hope we can recover and strengthen in a couple of decades. I don't expect this to happen due to the strength of the liberal party and the mass of people who will continue to vote benefits for themselves.

The next worse outcome is the US trips the scales with continued federal spending, tax increases, and regulation, so that our debt rating falls to the level that no other country will continue to loan us money. At that point we simply will not be able to fund the programs that are holding up the mass of dependent citizens. There will be a rapid crash at that point that will dwarf the great depression. This is, in my opinion, the most likely outcome for our country. At the present rate I expect this to happen within the 10 to 15 year range from today, meaning somewhere in the 2023 to 2028 time frame.

We are living on borrowed time. The only signs of hope are things are going so poorly now that some wise conservative politician would come along that is able to convince the citizens that we must change this liberal slide into oblivion and turn the country around. Even then it will be an uphill battle.

The absolute best outcome at this point, given our unmanageable federal debt, is to cut federal spending, lower the standard of living, cost of living, salary base, stabilize jobs, and fight our way back to the top through education, innovation, and manufacturing. This effort would resemble the huge shifts in the work force that occurred during WWII. We must all learn to spend less than we make during a long period of making less. The biggest culprit that is dragging down the country is the federal government.