My rating: 3 of 5 stars

A good compilation of Mr. Yon’s blog posts plus some original material from the relevant period of his war reporting in Iraq. The story is worthy, but the book is fatally flawed by a lack of professional editing. Mr. Yon’s war reporting deserves 10 stars, but the book, as a book, does not.

Michael Yon is unsurpassed in current-generation, in person, ground-truth war reporting. His honest perspectives on the day-to-day lives of the soldiers, sailors, marines and airmen (and women) are comparable only to the previous generations’ Ernie Pyle and Joe Galloway.

Mr. Yon has done his best to leverage the modern day’s blog and social media channels to get his message out, and is perhaps the world’s best known example of an independent, consumer supported, front line reporter. He is independent, works for no news agency, and is entirely economically supported via donations and book sales.

If you haven’t read his blog or his Facebook stream, they are worth the time. They are probably the only unfiltered information you will ever see about the Iraq and Afghanistan wars. By unfiltered I do not mean entirely objective. Mr. Yon has a point of view and he is very honest about reflecting that point of view in his messages. That honesty is what makes his reporting real, believable and, ultimately, valuable.

He has not been immune to being used by the media, the military, the politicians and others seeking to leverage gain. Even so, the net-net of what you gain from his raw dispatches from the field more than offset the spin-machine manifestations of his material.

* Blog: http://www.michaelyon-online.com/
(You will struggle to find a way to read his blog posts/reports from beginning to end. The blog site is not reflective of current-era content management system (CMS) capability so it’s nearly impossible to read things in a chronological order. Again, Mr. Yon’s work deserves better.)

* Facebook: https://www.facebook.com/MichaelYonFanPa…
* Twitter: http://twitter.com/#!/Michael_Yon

All of this adds up to an extraordinary person who has made amazing sacrifices to bring back stories and photos from wars and trouble spots all over the world, but especially Iraq and Afghanistan.

We are all in his debt for his efforts.

Having said all of that, Mr. Yon desperately needs a professional editor. His books are primarily compilations of his blog posts and are mostly direct copy and paste efforts. Consequently, they suffer from misspellings, grammar errors, reptition/duplication and other things you expect in a blog post pounded out while under fire at the front lines but don’t expect to find in a professional level book. Mr. Yon’s writing and photography deserve better.

As a writer, Mr. Yon shows continuing development since his early days, and has found his voice.

As a photographer, Mr. Yon demonstrates the power and capability of modern camera equipment. By that I mean that he has been able to bring back good, solid imagery, even from his initial efforts. He continues to improve as a shooter and his hard work and dedication in learning this new medium are obvious in the improvement he has shown over the years.

Summary:
* As a war reporter: Among the best – ever – from any era.
* As a writer: Good, with a mature and capable voice. Very much needs a professional editor for his books.
* As a photographer: Still a work in progress. The camera is not yet a fully formed tool in Mr. Yon’s hands, a tool that he can use as a medium of expression as he can his writing. He’s been moving through the stages of learning what all the controls are for, but even then his camera gear has been capable of bringing back amazing imagery. He’s at the point where he can capture a shot. As a shooter, that is different from creating a photograph as a means of expression. I believe he will continue to evolve and grow and will eventually develop an eye as a shooter, as he has developed a voice as a writer. Endless kudos to Mr. Yon for taking the gear into battle and capturing the shots.

Again, we are all in his debt for his efforts.

Regardless of how you feel about any of the conflicts, countries, regions or religions Mr. Yon covers, you will be hard pressed to find a more open and direct channel into what is actually happening there. Other information sources bring you the remains of multiple layers of filter, skew and spin. Mr. Yon brings you the ground truth.

View all my reviews

The political destiny of the U.S. for the next 25 years is sealed.

Here’s how:

In the United States, the proportion of the population aged >65 years is projected to increase from 12.4% in 2000 to 19.6% in 2030 (3). The number of persons aged >65 years is expected to increase from approximately 35 million in 2000 to an estimated 71 million in 2030 (3), and the number of persons aged >80 years is expected to increase from 9.3 million in 2000 to 19.5 million in 2030 (3). In 1995, the most populous states had the largest number of older persons; nine states (California, Florida, Illinois, Michigan, New Jersey, New York, Ohio, Pennsylvania, and Texas) each had more than one million persons aged >65 years (4). In 1995, four states had >15% of their population aged >65 years; Florida had the largest proportion (19%) (5). By 2025, the proportion of Florida’s population aged >65 years is projected to be 26% (5) and >15% in 48 states (all but Alaska and California) (5).

(source: CDC http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5206a2.htm )

Here’s how it looks graphically in one of those demographic pyramid charts I’m always ranting about. (Note that the axis scale changes; what’s important is the shape)

(click image for larger size)

(source: US Census Bureau)

The disaster of Japan’s demographics:

(click image for larger size)

Sources: Japan Statistics Bureau, Japan MIC, Japan Ministry of Health, Labour and Welfare

Note the inverting demographic pyramid as Japan moves through time. The point is that there are not enough young workers to pay for the social cost of the aging, non-working population, especially health care. Northern and western Europe and Russia exhibit similar demographic pyramids.

The only reason the U.S. chart doesn’t look like Japan’s is immigration. Immigration is the only chance to have enough young workers to pay for the older population. If you strip out the immigrant population in the U.S., the demographic pyramid looks a lot more like Japan’s.

So, what’s the point of this as it relates to politics?

Older people tend to vote more conservatively.

Sources:

http://www.gallup.com/poll/106042/age-vote-more-strongly-related-obamamccain-matchup.aspx

http://elections.nytimes.com/2008/results/president/national-exit-polls.html

Older people tend to vote for older people.

Source: http://onlinelibrary.wiley.com/doi/10.1111/j.1559-1816.1987.tb00318.x/abstract

Older people vote more than young people.

(click image for larger size)

Source: U.S. Census Bureau http://www.census.gov/compendia/statab/cats/elections/voting-age_population_and_voter_participation.html

Older people watch more television.

Sources:

http://www.variety.com/article/VR1117988273

http://www.huffingtonpost.com/2010/08/16/broadcast-tv-audience-agi_n_683009.html

http://www-958.ibm.com/software/data/cognos/manyeyes/visualizations/prime-time-tv-viewers-by-age-demog

Older viewers watch conservative news.

Sources:

http://www.pensitoreview.com/2009/05/05/average-age-of-fox-news-viewer-is-65/

http://www.hollywoodreporter.com/blogs/live-feed/fox-news-oldest-cable-audience-54230

Older people are the fastest growing segment of internet users and blog more than younger age cohorts.

Sources:

http://www.marketingcharts.com/interactive/social-networking-rises-especially-among-younger-set-11886/pew-change-internet-use-age-feb-2010jpg/

http://www.pewinternet.org/Infographics/2010/Internet-acess-by-age-group-over-time.aspx

http://pewresearch.org/pubs/1093/generations-online

There are 76 million baby boomers coming down the demographic pipe, 24.4% of the 2011 population.

Source: U.S. Census bureau

(click image for larger size)

Chart source: CDC

People in the U.S. are living longer.

(click image for larger size)

Source: World Bank

The boomers will be around for a long time: 1955 + 80 = 2035.

Source: elementary math

Political Implications:

As the rat of the boomers moves down the demographic snake and the U.S. population ages out, the U.S. will go through an extended period of conservative voting driven by an increasingly aging population that has little more to do than sit in front of the television and the internet.

In parallel to the aging out of the boomers and their increasing political conservatism and intellectual isolation and decline, the U.S. will go through an extended period of political, social and cultural crisis of confidence and identity as the rest of the world catches up economically and collectively threatens and attenuates the multi-faceted global dominance the boomers’ world view took for granted.

If geopolitics remain comparatively stable, the U.S. will remain relatively center-right politically when compared to OECD peers, as they also trend toward conservative politics driven by their own similar demographic shifts and perceived geopolitical and domestic threats.

Due to the demographics, there will be an opportunity for a radical shift in the U.S. to a far-right, ultra-nationalist political movement if a significant and extended crisis threatens “life as we’ve always known and remember it” in the U.S. Examples of disruption that could trigger such a move include: energy, food, climate, large-scale regional war, world war, financial collapse, etc.

Conclusion:

It is difficult to imagine any demographic or geopolitical scenario conducive to a sustained left/liberal political agenda in the U.S. for the next 25 years.

I read a good article on the radical re-making of the advertising market today: http://www.fastcompany.com/magazine/151/mayhem-on-madison-avenue.html

The article referenced a classic post by Clay Shirky that I’d read before, but was worth revisiting: http://www.shirky.com/weblog/2010/04/the-collapse-of-complex-business-models/

Clay, in turn, referenced a book by Joseph Tainter,  The Collapse of Complex Societies.

Tainter makes many compelling observations, as summarized by Shirky:

“Complex societies collapse because, when some stress comes, those societies have become too inflexible to respond. In retrospect, this can seem mystifying. Why didn’t these societies just re-tool in less complex ways? The answer Tainter gives is the simplest one: When societies fail to respond to reduced circumstances through orderly downsizing, it isn’t because they don’t want to, it’s because they can’t.

In such systems, there is no way to make things a little bit simpler – the whole edifice becomes a huge, interlocking system not readily amenable to change. Tainter doesn’t regard the sudden decoherence of these societies as either a tragedy or a mistake—”[U]nder a situation of declining marginal returns collapse may be the most appropriate response”, to use his pitiless phrase. Furthermore, even when moderate adjustments could be made, they tend to be resisted, because any simplification discomfits elites.

When the value of complexity turns negative, a society plagued by an inability to react remains as complex as ever, right up to the moment where it becomes suddenly and dramatically simpler, which is to say right up to the moment of collapse. Collapse is simply the last remaining method of simplification.”

Although Shirky was using Tainter’s work to illustrate a point about the revolution in media and content production, specifically video, and it is perfectly applicable to the collapse of the old business models in advertising, it is also worth considering in Tainter’s original context: societies as a whole.

I’ve long had an essay simmering in my head regarding the brittle nature of the United States, as a pure reflection of that word: brittle, meaning very strong in compression but lacking the ability to resist stresses across its internal structure. For instance, if you put a brittle pane of glass on a flat surface, it will easily support a very large amount of weight placed upon it. However, if you support each end of that pane of glass and place even a small weight on the center, it will crack and shatter. The pane of glass, like the U.S. and most nation states, is capable of resisting huge amounts of external force when those forces are perceived as being placed uniformly against the entire structure of the nation. However, if those forces are applied unevenly, in a way that stresses the internal bonds of the structure, disunity results.

A similar situation is at work in China, where its recurring cycle of tension between the rich trading provinces along the coast and the still-mired-in-poverty interior provinces is placing stress on its internal bonds. China uses two primary means to maintain its internal coherence: rising economic prosperity and stoking nationalism via the boogey men of Japan, the West and the U.S., not necessarily in that order. When economic prosperity falters, there are coincidental, and certainly convenient, international incidents with Japan or other neighboring countries, often accompanied by a revisiting of Japanese WWII atrocities inflicted on China. If local conflict isn’t enough to incite unifying nationalism, then a few rounds of anti-West or anti-U.S. rhetoric or parallel international incidents usually does the trick.

You may or may not notice a similar pattern, with a reversed set of roles and leading villains, in the U.S. In geopolitics, stoking nationalism to increase internal cohesion and cement the political power of the ruling class is typically the first official act in the face of dis-unifying challenges. The U.S. is no exception to that rule.

I perceive a potential unhappy confluence of forces in the near- to mid-term in this regard.

It wouldn’t take much of Tainter’s reduction in circumstances to produce enough internal stresses to shatter a brittle U.S.

The only thing that could hold it together would be the same basic tools that China (and everybody else) uses: economic prosperity or supposed external threats to fuel cohesive nationalism. Excess economic prosperity sufficient to offset reduction in circumstances does not look to be likely in the U.S. in the foreseeable future. Lacking economic prosperity, there’s only one typical, basic, blunt tool remaining: artificially induced and inflated nationalism.

Since the rise of the nation state, inflated nationalism coupled with the perception of external threats has a direct correlation with negative outcomes.

Stay tuned.

I compiled my thoughts on the primary challenges the United States faces in the coming decade, and ways to overcome them, here: http://www.hackneys.com/docs/facingthefuture.pdf

The primary focus in this collection is on domestic challenges, although some geopolitical issues are addressed.

.

Following is a good overview of a current geopolitical situation from Stratfor, a public domain intelligence analysis firm.

If you are interested in the particular issue and region at hand, Israel / Palestinians / rising Turkey / etc., you will probably find it of value.

However, its true worth lies in some pearls of geopolitical wisdom, some geopolitical universal truths, which are sprinkled within.

In particular, these excerpts are of value:

• Where knowledge is limited, and the desire to learn the complex reality doesn’t exist, public opinion can be shaped by whoever generates the most powerful symbols.
• … on a matter of only tangential interest, governments tend to follow their publics’ wishes, however they originate.
• It was not the truth or falsehood of the narrative that mattered.
• Public opinion matters where issues are not of fundamental interest to a nation.
• …they seem to think that the issue is whose logic is correct. But the issue actually is, whose logic will be heard?
• …this sort of warfare has nothing to do with fairness. It has to do with controlling public perception and using that public perception to shape foreign policy around the world.
• …controlling public opinion requires subtlety, a selective narrative and cynicism.

These constants, these irreducible facts, are applicable to both domestic and foreign policy. They are the fundamentals of geopolitics as it applies to public opinion.

If you grasp them, you can begin to understand what is happening outside the fishbowl.

If you come to appreciate the full scope and implications of this one: “Where knowledge is limited, and the desire to learn the complex reality doesn’t exist, public opinion can be shaped by whoever generates the most powerful symbols.” you can also begin to understand what is happening inside the fishbowl.

* * * * *

Flotillas and the Wars of Public Opinion

May 31, 2010

By George Friedman

On Sunday, Israeli naval forces intercepted the ships of a Turkish nongovernmental organization (NGO) delivering humanitarian supplies to Gaza. Israel had demanded that the vessels not go directly to Gaza but instead dock in Israeli ports, where the supplies would be offloaded and delivered to Gaza. The Turkish NGO refused, insisting on going directly to Gaza. Gunfire ensued when Israeli naval personnel boarded one of the vessels, and a significant number of the passengers and crew on the ship were killed or wounded.

Israeli Deputy Foreign Minister Danny Ayalon charged that the mission was simply an attempt to provoke the Israelis. That was certainly the case. The mission was designed to demonstrate that the Israelis were unreasonable and brutal. The hope was that Israel would be provoked to extreme action, further alienating Israel from the global community and possibly driving a wedge between Israel and the United States. The operation’s planners also hoped this would trigger a political crisis in Israel.

A logical Israeli response would have been avoiding falling into the provocation trap and suffering the political repercussions the Turkish NGO was trying to trigger. Instead, the Israelis decided to make a show of force. The Israelis appear to have reasoned that backing down would demonstrate weakness and encourage further flotillas to Gaza, unraveling the Israeli position vis-à-vis Hamas. In this thinking, a violent interception was a superior strategy to accommodation regardless of political consequences. Thus, the Israelis accepted the bait and were provoked.

The ‘Exodus’ Scenario

In the 1950s, an author named Leon Uris published a book called “Exodus.” Later made into a major motion picture, Exodus told the story of a Zionist provocation against the British. In the wake of World War II, the British — who controlled Palestine, as it was then known — maintained limits on Jewish immigration there. Would-be immigrants captured trying to run the blockade were detained in camps in Cyprus. In the book and movie, Zionists planned a propaganda exercise involving a breakout of Jews — mostly children — from the camp, who would then board a ship renamed the Exodus. When the Royal Navy intercepted the ship, the passengers would mount a hunger strike. The goal was to portray the British as brutes finishing the work of the Nazis. The image of children potentially dying of hunger would force the British to permit the ship to go to Palestine, to reconsider British policy on immigration, and ultimately to decide to abandon Palestine and turn the matter over to the United Nations.

There was in fact a ship called Exodus, but the affair did not play out precisely as portrayed by Uris, who used an amalgam of incidents to display the propaganda war waged by the Jews. Those carrying out this war had two goals. The first was to create sympathy in Britain and throughout the world for Jews who, just a couple of years after German concentration camps, were now being held in British camps. Second, they sought to portray their struggle as being against the British. The British were portrayed as continuing Nazi policies toward the Jews in order to maintain their empire. The Jews were portrayed as anti-imperialists, fighting the British much as the Americans had.

It was a brilliant strategy. By focusing on Jewish victimhood and on the British, the Zionists defined the battle as being against the British, with the Arabs playing the role of people trying to create the second phase of the Holocaust. The British were portrayed as pro-Arab for economic and imperial reasons, indifferent at best to the survivors of the Holocaust. Rather than restraining the Arabs, the British were arming them. The goal was not to vilify the Arabs but to villify the British, and to position the Jews with other nationalist groups whether in India or Egypt rising against the British.

The precise truth or falsehood of this portrayal didn’t particularly matter. For most of the world, the Palestine issue was poorly understood and not a matter of immediate concern. The Zionists intended to shape the perceptions of a global public with limited interest in or understanding of the issues, filling in the blanks with their own narrative. And they succeeded.

The success was rooted in a political reality. Where knowledge is limited, and the desire to learn the complex reality doesn’t exist, public opinion can be shaped by whoever generates the most powerful symbols. And on a matter of only tangential interest, governments tend to follow their publics’ wishes, however they originate. There is little to be gained for governments in resisting public opinion and much to be gained by giving in. By shaping the battlefield of public perception, it is thus possible to get governments to change positions.

In this way, the Zionists’ ability to shape global public perceptions of what was happening in Palestine — to demonize the British and turn the question of Palestine into a Jewish-British issue — shaped the political decisions of a range of governments. It was not the truth or falsehood of the narrative that mattered. What mattered was the ability to identify the victim and victimizer such that global opinion caused both London and governments not directly involved in the issue to adopt political stances advantageous to the Zionists. It is in this context that we need to view the Turkish flotilla.

The Turkish Flotilla to Gaza

The Palestinians have long argued that they are the victims of Israel, an invention of British and American imperialism. Since 1967, they have focused not so much on the existence of the state of Israel (at least in messages geared toward the West) as on the oppression of Palestinians in the occupied territories. Since the split between Hamas and Fatah and the Gaza War, the focus has been on the plight of the citizens of Gaza, who have been portrayed as the dispossessed victims of Israeli violence.

The bid to shape global perceptions by portraying the Palestinians as victims of Israel was the first prong of a longtime two-part campaign. The second part of this campaign involved armed resistance against the Israelis. The way this resistance was carried out, from airplane hijackings to stone-throwing children to suicide bombers, interfered with the first part of the campaign, however. The Israelis could point to suicide bombings or the use of children against soldiers as symbols of Palestinian inhumanity. This in turn was used to justify conditions in Gaza. While the Palestinians had made significant inroads in placing Israel on the defensive in global public opinion, they thus consistently gave the Israelis the opportunity to turn the tables. And this is where the flotilla comes in.

The Turkish flotilla aimed to replicate the Exodus story or, more precisely, to define the global image of Israel in the same way the Zionists defined the image that they wanted to project. As with the Zionist portrayal of the situation in 1947, the Gaza situation is far more complicated than as portrayed by the Palestinians. The moral question is also far more ambiguous. But as in 1947, when the Zionist portrayal was not intended to be a scholarly analysis of the situation but a political weapon designed to define perceptions, the Turkish flotilla was not designed to carry out a moral inquest.

Instead, the flotilla was designed to achieve two ends. The first is to divide Israel and Western governments by shifting public opinion against Israel. The second is to create a political crisis inside Israel between those who feel that Israel’s increasing isolation over the Gaza issue is dangerous versus those who think any weakening of resolve is dangerous.

The Geopolitical Fallout for Israel

It is vital that the Israelis succeed in portraying the flotilla as an extremist plot. Whether extremist or not, the plot has generated an image of Israel quite damaging to Israeli political interests. Israel is increasingly isolated internationally, with heavy pressure on its relationship with Europe and the United States.

In all of these countries, politicians are extremely sensitive to public opinion. It is difficult to imagine circumstances under which public opinion will see Israel as the victim. The general response in the Western public is likely to be that the Israelis probably should have allowed the ships to go to Gaza and offload rather than to precipitate bloodshed. Israel’s enemies will fan these flames by arguing that the Israelis prefer bloodshed to reasonable accommodation. And as Western public opinion shifts against Israel, Western political leaders will track with this shift.

The incident also wrecks Israeli relations with Turkey, historically an Israeli ally in the Muslim world with longstanding military cooperation with Israel. The Turkish government undoubtedly has wanted to move away from this relationship, but it faced resistance within the Turkish military and among secularists. The new Israeli action makes a break with Israel easy, and indeed almost necessary for Ankara.

With roughly the population of Houston, Texas, Israel is just not large enough to withstand extended isolation, meaning this event has profound geopolitical implications.

Public opinion matters where issues are not of fundamental interest to a nation. Israel is not a fundamental interest to other nations. The ability to generate public antipathy to Israel can therefore reshape Israeli relations with countries critical to Israel. For example, a redefinition of U.S.-Israeli relations will have much less effect on the United States than on Israel. The Obama administration, already irritated by the Israelis, might now see a shift in U.S. public opinion that will open the way to a new U.S.-Israeli relationship disadvantageous to Israel.

The Israelis will argue that this is all unfair, as they were provoked. Like the British, they seem to think that the issue is whose logic is correct. But the issue actually is, whose logic will be heard? As with a tank battle or an airstrike, this sort of warfare has nothing to do with fairness. It has to do with controlling public perception and using that public perception to shape foreign policy around the world. In this case, the issue will be whether the deaths were necessary. The Israeli argument of provocation will have limited traction.

Internationally, there is little doubt that the incident will generate a firestorm. Certainly, Turkey will break cooperation with Israel. Opinion in Europe will likely harden. And public opinion in the United States — by far the most important in the equation — might shift to a “plague-on-both-your-houses” position.

While the international reaction is predictable, the interesting question is whether this evolution will cause a political crisis in Israel. Those in Israel who feel that international isolation is preferable to accommodation with the Palestinians are in control now. Many in the opposition see Israel’s isolation as a strategic threat. Economically and militarily, they argue, Israel cannot survive in isolation. The current regime will respond that there will be no isolation. The flotilla aimed to generate what the government has said would not happen.

The tougher Israel is, the more the flotilla’s narrative takes hold. As the Zionists knew in 1947 and the Palestinians are learning, controlling public opinion requires subtlety, a selective narrative and cynicism. As they also knew, losing the battle can be catastrophic. It cost Britain the Mandate and allowed Israel to survive. Israel’s enemies are now turning the tables. This maneuver was far more effective than suicide bombings or the Intifada in challenging Israel’s public perception and therefore its geopolitical position (though if the Palestinians return to some of their more distasteful tactics like suicide bombing, the Turkish strategy of portraying Israel as the instigator of violence will be undermined).

Israel is now in uncharted waters. It does not know how to respond. It is not clear that the Palestinians know how to take full advantage of the situation, either. But even so, this places the battle on a new field, far more fluid and uncontrollable than what went before. The next steps will involve calls for sanctions against Israel. The Israeli threats against Iran will be seen in a different context, and Israeli portrayal of Iran will hold less sway over the world.

And this will cause a political crisis in Israel. If this government survives, then Israel is locked into a course that gives it freedom of action but international isolation. If the government falls, then Israel enters a period of domestic uncertainty. In either case, the flotilla achieved its strategic mission. It got Israel to take violent action against it. In doing so, Israel ran into its own fist.

* * *

Reprinting or republication of this report on websites is authorized by prominently displaying the following sentence at the beginning or end of the report, including the hyperlink to STRATFOR: 

“This report is republished with permission of STRATFOR“  http://www.stratfor.com/

* * * * *

 Sources:

• Stratfor

As part of our effort to reintegrate into American society and its culture, we’re spending part of our summer in the air conditioned retreat of the Paramount, a faithfully restored theater originally built in 1915 to host vaudeville as the Majestic and transformed in 1930 into a Baroque Revival movie palace, its present form.

The theater provides a retreat from both the heat and day-to-day reality into the bygone eras of Hollywood and foreign film classics. The films are replete with villains and heroes defined by art direction, staging and dialog that shorthands races, roles, conflicts, attitudes and passions into nifty set-piece scenes. This foreshortening of life’s challenges and irresolvable conflicts into tightly packaged, neatly wrapped, emotionally digestible, bite sized chunks contrasts with later eras’ films that showcased, if not celebrated, the irredeemable flaws of humanity on individual, societal, planetary and galactic scales. This latter film genre, while undoubtedly more accurate and reflective of the true nature of life, is much more challenging material, and over time often leads to a retreat into the simpler, soft-focus, one-way pursuit of the nostalgia of a “simpler time.”

As tempting as the seductive, simple packaging of human and national characteristics in film classics can be, they can also serve as a useful lens through which to view our modern world. For instance, this weekend’s fare included the celebrated artistic convergence of producer / director Elia Kazan and a troupe of talented actors, writers, composers, cinematographers, art directors and production professionals: 1951’s A Streetcar Named Desire and 1954’s On The Waterfront.

Since I often retain an outside-looking-in perspective on the U.S., I sometimes derive different views of cultural artifacts than others around me here in the United States. Consequently, the primary roles in the two films, viewed back-to-back as a double feature, couldn’t help but jump out at me as parallels of the roles the United States is often cast in by the various countries on the geopolitical scene where we’ve spent time during the last decade.

The world’s rapidly developing economies, such as Brazil and Russia, as well as the merely developing nations, often see the U.S. as Father Barry, the righteous priest, constantly goading others to do the right thing, as he defines it. At best, the developing nations  emphasize Father Barry’s courageous stand for virtue, freedom, honesty and integrity. At worst, they note that their labors in brutal conditions enable Father Barry’s institution its power, position and wealth.

Western Europe often casts the United States as Stanley Kowalski, the crude brute, ruled by his adolescent emotions, too immature for his physical strength, capable of little beyond browbeating, manipulation and abuse. Unequipped to rise beyond his commonness, he surrounds himself with equally low-life immigrants and rejects the only example of higher breeding, culture and lofty education he encounters.

Bombastic socialists, such as Hugo Chavez, popularize the identity of America as Johnny Friendly, the corrupt mob boss who rules his domain with an iron fist, brutally subjugating the masses through intimidation, economic marginalization, violence and death, while he and his henchmen wallow in wealth and power.

Other nations in Latin America are more nuanced in their casting of America as mobster. The rest of the region puts the United States in the role of The Boss of Bosses, who makes but a brief cameo appearance as the puppeteer behind the Johnny Friendlys of the world. In their view, America as The Boss of Bosses silently and mysteriously pulls the strings that control economies, rainfall and whether or not you have a flat tire on the way to work today through the omniscient, omnipresent and omni-powerful CIA.

Islamists portray the United States as Stella Kowalski, debauched and decadent, wife of Satan himself, ready and willing to bring forth further generations of depraved, bestial, godless Stanleys to further pollute the world. Stella, unable to resist the sinful allure of Stanley’s Satan, legitimizes all that is unclean and unholy and therefore has no place in a sanctified realm.

China and other nations, tribes and individuals vested in the current century’s geopolitical realities place the United States solidly in the starring role of Blanche DuBois. Blanche, born into unimaginable wealth, power and prestige, joined her forbears in squandering her remaining wealth. Relevant only in her own fantasy world, trapped in addiction and unable to face reality, she ends in a downward spiral of decay, denial and collapse.

People who view the United States in a positive light, and there are many more of them out there than the two dominant world-view narratives extant in America allow to be known, tend to cast the United States as Terry Malloy. Sure, Terry is simple minded, and he’s made some mistakes by choosing the wrong friends and being overly loyal to people he thought he could trust; but, then again, his is loyal and he is trusting and he is a guy who is willing to fight for, and lay his life on the line for, what he believes in. In fact, if Terry believes in you, he’ll lay his life on the line for you as well. Terrys are very rare on the geopolitical scene.

If Americans picked a role for the United States, they might pick good-hearted Harold “Mitch” Mitchell, who perhaps too late realizes he can’t go it alone and needs a partner, narrowly avoids being hoodwinked by a wily deceiver, but in the end stands up for his values and rejects his suitor as unworthy. That would be a fairly subtle reading of the role as applied to the United States, and Mitch is difficult to see as purely heroic.

Consequently, most Americans would probably also pick Terry Malloy, the closest role to purely heroic outside of the courageous, saintly Edie Doyle.

In the Hollywood ending to the movie On The Waterfront, Terry Malloy rises from his pummeling by Johnny Friendly’s gang, shakes off his injuries and triumphantly leads the newly independent dockworkers into a fresh, cleansed-of-past-sins era (cue swelling music in the Leonard Bernstein score).

In Budd Schulberg’s original screenplay and his subsequent novel version of the story, Terry Malloy is brutally murdered by the mob, the realpolitik power of the docks.

Only time will tell what role best suits the United States. And which ending will apply.

* * * * *

A Streetcar Named Desire (1951)

Cast (in credits order) verified as complete 

* * * * *

On The Waterfront (1954)

Cast (in credits order) verified as complete 

* * * * *

Sources:

Paramount Theater
History: http://www.austintheatre.org/site/PageNavigator/venues/paramount/history
Films: http://www.austintheatre.org/site/PageNavigator/shows_events/films

A Streetcar Named Desire
IMDb: http://www.imdb.com/title/tt0044081/
Wikipedia: http://en.wikipedia.org/wiki/A_Streetcar_Named_Desire_(1951_film)

On The Waterfront
IMDb: http://www.imdb.com/title/tt0047296/
Wikipedia: http://en.wikipedia.org/wiki/On_the_waterfront

* * * * *

As Europe slowly rebuilt from the ashes of war, the Islamic empires continued their long slumber, India scuffled through its often chaotic early democracy, Latin America swung wildly from far-right to far-left despots and China suffered unspeakable suffering under Maoist extremes, the United States bobbed cheerily along the sunny seas of prosperity.

During this time, the U.S. took on cost after cost, burden after burden, both domestically and internationally. From supporting the world’s largest, most expensive military, to feeding internal parasites that sucked economic vitality like a lamprey eel, America endured all the costs and burdens, yet kept on growing.

Once the Soviet Union fell, the United States stood well and truly alone atop the world, the sole superpower, capable, so the story went, of doing whatever it wanted, wherever it wanted, whenever it wanted.

During the decades from the end of WWII to the end of the century, the American population came to expect endless growth, ever-increasing prosperity, an always better life for their children and unchallenged global precedence.

Today, just 10 years into the new century, all of those expectations, and all of their accompanying assumptions, are being challenged. America is no longer the unchallenged global leader. America’s world standing and reputation have been severely dented. America’s prosperity has stopped, and in fact reversed, in the most severe downturn since the great depression. For the first time ever in its long history of endless optimism, a majority of Americans think their children will have a worse life than they did. And if that wasn’t enough, America can no longer afford many of the costs and burdens it currently bears financially, socially and politically.

There are many ways to decide what can be done to restore American prosperity and ensure a better life for our children and grandchildren. As a nation and as individuals, we can make those choices by any number of criteria. I believe the way forward consists of a very simple test: we can only keep what we can afford.

As a nation, we can no longer afford:

• Money in Politics

Money has irretrievably corrupted the political process in the United States. Elected representatives are now engaged in full time fund raising from the point they choose to run for office until the point they lose their last election. Actually governing the states and the nation were delegated to staffers and lobbyists long ago. The politicians do one thing and one thing only: pursue money. Nine billion dollars was spent in 2009 buying political influence in Washington, D.C., alone, to say nothing of what was spent at the state and local level.  

Under this system, we elect the people who can demonstrate they can best spend unlimited amounts of money. The more influence they sell, the more money they take in, the more they can spend. We end up with the people who know the least about how to manage money and the most about how to spend it. This fact goes a long way to explaining why our public debt and runaway spending on entitlement programs is destroying the country’s finances and undermining our economic and national stability.

It doesn’t need to be this way.

Wouldn’t it be better to elect people who demonstrate they can make the most of a fixed amount of money, a specific budget, very similar to how you run your household—making do on the money you have? This is how other successful industrialized countries run elections. Those countries give each candidate a fixed, specific amount of money and watch to see who can demonstrate they can make best use of that money. They elect people who are the most efficient at using the money they have available.

I believe that is the best way forward for America. We can no longer afford money in politics.

Give each candidate a fixed amount of public money. Outlaw all other money in politics: private, business, union, PAC, special entity, international, etc.

Yes, there will still be crooked politicians. Yes, there will still be individuals, businesses, unions and organizations who buy off politicians. We will still need to arrest and prosecute those people. It will still be better than it is today.

We can’t afford money in politics anymore; it has corrupted our political system. We must eliminate money in politics.

• Gerrymandering

Gerrymandering is the process of creating distorted electoral districts at the state level to ensure that a particular political party will always win the elections in that district. The resulting rigged elections in American gerrymandered districts are no different than rigged elections in Putin’s Russia, Chávez’s Venezuela, or Communist China. Just as in those places, the winner in an American gerrymandered district has already been determined.

Gerrymandering ensures “safe” districts for one or the other of the two political parties. As long as gerrymandering continues, America is not run by the people, it is run by the political parties.

Gerrymandering means that there is no contest in the November elections, when most voters go to the polls. Instead, the winner of the spring primary elections determines who will win that district. The people that vote in the primary elections are predominantly party activists, extremists and fringe ideologues. Those extremists elect extremist, ideologue candidates. Gerrymandering guarantees that political extremist ideologues will be elected and dominate Congress.

In the 2010 election, 331 of the 435 House seats, 76 percent, are considered “safe” or gerrymandered. Those “safe” seats will go to unyielding ideologues that are incapable of the compromises required for governance. If they compromise with the few remaining moderates in their own party, much less the opposing party, they will lose the next primary election. Gerrymandering guarantees a gridlocked, non-functioning government.

We can’t afford gerrymandering anymore. It has created a Congress filled with extremist ideologues incapable of governance. We must eliminate gerrymandering.

• A Permanent Ruling Class

In exchange for the material and social success of the latter half of the 20^th century, the American people abdicated governance to a fixed, permanent political class. This political class almost all hailed from the same families, neighborhoods, social circles, elite colleges, law schools and informal and formal networks. As long as the prosperity kept flowing and the good times kept rolling, the American people let the ruling political class have their way with running the government and the country. Although elections were held and the token outsider occasionally slipped into office, the same group of people, the ruling political class, ran the show. They were, and are, the undisputed drivers of the American bus.

The inevitable outcome is not unexpected and is reflected of the maxim, “Power corrupts. Absolute power corrupts absolutely.” The longer the ruling political class stayed in power, the more the country was shaped to ensure their continued power and economic success.

America was founded by a ruling political class of wealthy, white, male land owners. It remains a political ruling class primarily of wealthy, white men. While only about one in a hundred Americans is a millionaire, more than 44 of every hundred congress members are millionaires. The average net worth of a member of Congress is more than $6.3 million dollars, more than ten times the average net worth of an American citizen. Women make up 51 percent of the U.S. and only 18 percent of Congress. Minorities are 34 percent of the U.S. but only 16 percent of Congress.

The same permanent ruling political class has been running the United States for a long time. Their priorities have put the country exactly where it is right now. No one else is more responsible for where we are as a nation than this small group of people. They can’t point the finger at anyone else—they’ve been driving this bus for generations. Where we are now is nobody’s fault but theirs.

The ruling political class thinks they deserve to run the country because of birthright. Their parents ruled the United States, so they believe they deserve to rule the United States. The United States was founded on the principal that no one gets anything, least of all political power and control, due to birthright. We fought a war with a ruling King to establish that principal, enshrined in our country’s independence.

The ruling political class thinks they deserve to run the country because they are elites, residents of the pinnacles of society. They attended all the right schools, they obtained all the right degrees, they worked at all the right places, and they know all the right people. The U.S. is, theoretically, a meritocracy, where people earn their place in life due to their abilities and their efforts. The U.S. is, theoretically, where one can be smart and rise up through society all the way to the top, including positions of political power and control.

The ruling political class thinks they deserve to run the country because they are so smart. Firstly, if they are so smart, how did we end up where we are right now? Secondly, there are plenty of smart people in the United States, of which the vast majority are outside the ruling class.

The permanent ruling political class has been controlling America for generations.

They put us in the position we are now. They had their chance and this is what they made of it.

I believe we should give some other smart Americans an opportunity to drive the bus.

We can’t afford a permanent ruling class anymore. We need a different set of bus drivers.

• A Nation of Lawyers

One negative effect of a fixed, permanent ruling political class is that the United States became more and more a tangled web of laws and regulations that ensured that the ruling political class’s dominant profession, lawyers, were required for even the most trivial engagement with business or society. Fewer than one half of one percent of Americans are lawyers while more than 38 percent of Congress are lawyers. More than half of all presidents, including our current president, have been lawyers. Over its history, the United States slowly but inevitably transitioned to a nation of the lawyers, by the lawyers, for the lawyers.

The solution does not lie in a Shakespearian outcome, as in, “The first thing we do, let’s kill all the lawyers.” – Dick, the butcher, Henry VI, part II, act IV, scene ii, lines 83–84.

We need laws. We are, after all, theoretically a country of laws, not men. With no laws, we have no civilization.

We need lawyers to provide service within those laws. We cannot function without lawyers.

In my view, it is wrong to paint all lawyers with a broad brush as the source of all of our problems. Not all lawyers are inherently evil. In fact, one of the people I admire most is a lawyer. Over my career I have worked with many lawyers of very high merit, character and integrity.

The solution is not in a blanket condemnation of lawyers. The solution is in a society that is not run for the ongoing, structurally entwined and integrated, nearly exclusive, benefit of lawyers.

American doctors state that more than 30% of surgeries, testing, procedures and prescriptions in the United States are done due to “defensive” medicine to protect doctors and hospitals from lawsuits. The U.S. spent $2.4 trillion dollars on health care in 2008. You can do the math.

Various studies estimate the overall cost to the U.S. economy due to its excessively litigious environment related to legal liability at 10 to 20 percent. In 2009 the U.S. gross national product was $14.462 trillion. You can do the math.

There was a time when the U.S. economy was so robust and growing so fast that we didn’t notice, much less care, that we were spending 30 dollars out of every hundred of health care costs and 10 to 20 dollars out of every hundred in the entire economy on out of control litigation, or in colloquial terms, on ambulance chasing lawyers.

We are no longer in those times when we didn’t notice and it didn’t matter.

We can no longer afford a country of the lawyers, by the lawyers, for the lawyers. We must reign in the lawyers and end excessive litigation.

• Foreign Oil

In 2008 the United States sent $1,024,483,750 per day overseas for foreign oil. That’s more than $1 billion dollars—per day—every 24 hours—sent overseas.

That’s one billion dollars a day that could be improving our country and fixing our problems. Instead we sent one billion dollars a day to other countries.

In all of 2008 we sent $373,936,568,750, that’s $374 billion dollars, overseas to buy oil.

Included in that year’s total amount was more than $201billion dollars sent to Algeria, Angola, Ecuador, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela, the countries that make up the Organization of Petroleum Exporting Countries (OPEC). Iran is also a member of OPEC, but we don’t currently buy any oil from them due to U.S. economic sanctions.

The nations of OPEC control 76 percent of the world’s proven reserves of oil. The nations of OPEC also enjoy the receipt of $201 billion dollars in oil revenue a year from the United States. That revenue buys power and control for the despots and royal families that control nearly all of the OPEC countries.

In exchange for this extraordinary wealth and the military protection provided by the United States over the oil rich countries of the Middle East, some of those autocrats and royal families have been very friendly and helpful to the U.S.; others have been publicly helpful, but dubious to antagonistic to outright hostile behind the scenes. Some, such as Iran, are openly hostile.

It is alleged that some of the OPEC countries use a portion of their oil income to fund terrorist organizations such as Al Qaeda, a group committed to the destruction of the United States, its society and its people. Among the OPEC members in our own hemisphere, Hugo Chávez, strongman ruler of Venezuela, has called for the outright destruction of the United States as we know it, while his protégé, Rafael Correa, president of Ecuador, a fervent anti-yanqui nationalist, supports him in his efforts while initiating his own.

In 2008, the U.S. sent more than $80 billion dollars to the Persian Gulf oil countries, of which an unknown amount was diverted to people doing everything they can to kill every last American.

In 2008, the U.S. sent more than $40 billion dollars to Hugo Chávez, who leads the world in anti-American zealotry and vitriol, and $7.5 billion dollars to his South American sidekick in America bashing, Rafael Correa.

In addition, in 2008 the U.S. sent more than $15.7 billion dollars to our old Cold War foe and resurgent world power, Russia, to buy their oil.

All told, in 2008 the U.S. sent $143.2 billion dollars to people who in one way or another, to one extent or another, to one degree or another, are trying to kill us.

We are the first civilization in the history of mankind to fund its own destruction.

We can no longer afford to send over one billon dollars a day overseas to buy foreign oil. We can no longer afford to fund our own destruction. We must end our dependence on foreign oil.

• Partisanship

“…it doesn’t make a damn whether you’re a Democrat or a Republican if you’ve forgotten you’re an American” – former Senator Alan Simpson (Republican, Wyoming)

The two American political parties, the Republicans and the Democrats, have held power in this country in their present form for over 150 years. For good or for ill, they have created the nation we live in today.

In recent times, thanks to gerrymandering, both parties have drifted towards their respective radical fringes, becoming little more than holding tanks for extremist ideologues. Having lost nearly every moderate member, the parties are no longer capable of finding common ground with each other. The ideologues that control the parties are incapable of seeing the world in any way other than pure black and white. In the view of the extremists, the world is divided between party loyalists who drank the Kool-Aid and will march to any tune the party leadership calls and 100 percent deserve-to-die, evil enemy.

There is little, if any, social interaction between members of the opposing parties in Congress. There is little, if any, meaningful cooperation between members of the opposing parties. There is little, if any, concern for anything other than achieving and retaining power for their party’s sake between members of the opposing parties. There is little, if any, effort put into governing the country they were elected to serve versus extending power and control between members of the opposing parties. 

Protected by their safe, gerrymandered districts, extremist ideologues have seized control of the two political parties that control the United States. These hard-line extremists cannot compromise or they will be voted out in the next primary election, thus they are incapable of anything but hard-line agendas. Since they cannot compromise in any form, by any means, these politicians are not equipped to function in the real world of politics, which is, by definition, the art of the possible, not the realm of the rigid.

Increasingly solidified into distant, opposing camps incapable of communication, much less governance, preoccupied by plotting the downfall of their rivals above all other concerns, the parties have abandoned the helm. The ship of state has been set adrift, free to be blown upon the rocks by the winds of a rapidly changing world and battered into splinters by the crashing waves of our country’s enemies.

The two parties, as they have amply demonstrated over the last decade, are incapable of addressing, much less overcoming, the major threats the country faces, such as the economy, public debt, annual deficits, energy, education, effective financial regulation, health care costs, etc.

Because they are incapable of the compromises required to govern in any form short of a totalitarian dictatorship, the parties have proven themselves unsuited to participation in the representative democracy used in the United States.

The two parties must reform or be replaced. The politicians of the two parties must rediscover that they are not elected to serve their parties, they are elected to serve their constituents, and all of their constituents at that. The two parties must break from their current operating credo of “Destroy the other party at all costs, including the country if required,” and return to a mission of being Americans first and party members second.

We need a functioning government. We have serious, existential threats to this country that must be overcome in this decade. We cannot afford gridlock.

We cannot afford the two parties in their current form. Partisanship must be ended. 

• Couch Potatoes

Starting in about 1970, the U.S. food industry enthusiastically adopted High Fructose Corn Syrup (HFCS). They liked it so much they basically stopped using real sugar in processed food and drinks. Until recently, HFCS was the only sweetener used in non-diet soft drinks, e.g. sport drinks, fruit juices, cola, pop, and soda. It is also widely used in other food products such as soups, condiments, deserts, crackers, cereals, etc. In fact, it is often challenging to find a single processed food that does not contain HFCS.

 HFCS is cheaper than sugar and it tastes much sweeter. That was a powerful combination for the food and beverage industry and the American consumer. So powerful, in fact, it proved irresistible.

Consequently, average annual per-capita consumption of HFCS in the U.S. went from zero in 1970 to over 60 pounds (27.22 kilos) today. That means that every single American you know consumes an average of over 60 pounds (27.22 kilos) of HFCS every year.

In 1988 Taco Bell introduced unlimited soda refills and 7-Eleven unveiled the 64 ounce “Double Gulp.” Consumption volume of drinks and other processed foods skyrocketed as a consequence of these and similar “super-size” market offerings.

Since the introduction of HFCS and the “super-sizing” of food and drink portions, obesity in America has more than doubled.

More than one third of adults in the United States are obese.

Since 1980, the prevalence of obesity has tripled among school-age children and adolescents.

More than three in ten American children are overweight or obese.

Health effects of obesity include high blood pressure; diabetes; heart disease; joint problems, including osteoarthritis; sleep apnea and respiratory problems; cancer; metabolic syndrome; and psychosocial effects. Most of these conditions are chronic and can more than double the lifetime cost of health care compared to a non-obese citizen. Long term, obesity nearly doubles the rates of debilitating, high cost chronic diseases and disability.

Due to their poor overall health, and specifically due to high rate of obesity, citizens of the United States face a drop in average life expectancy for the first time in the nation’s modern history.

We can no longer afford a nation of overweight, unhealthy adults and children. We can’t afford the loss of productivity among working adults due to chronic health conditions brought on by poor health. We cannot afford the costs of health care for an unhealthy nation, now, or in the future.

We cannot afford a nation of couch potatoes. Poor health and high obesity rates must end.

• Agriculture Subsidies

The United States spends more than $20 billion dollars per year on farm crop programs, including direct subsidies. However, this amount dramatically understates the total cost of artificial pricing and subsidy programs because it does not include other costs and economic effects.

Primary forms of agriculture subsidy include: 

•  
  • Direct payments to farmers and landlords
  • Price supports implemented with government purchases and storage
  • Regulations that set minimum prices by location, end use, or some other characteristic
  • Subsidies for such items as crop insurance, disaster response, credit, marketing, and irrigation water
  • Export subsidies
  • Import barriers in the form of quotas, tariffs, or regulations

In total, the average rate of “producer support estimate” for the heavily supported commodities in the United States ranges from about 55 percent of the value of production for sugar to about 22 percent for oilseeds. For the less-supported commodities the rate is usually below 5 percent.

Direct subsidy programs typically transfer income from consumers and taxpayers to farm operators, especially to owners of farmland and other resources used in farm production. Farm subsidies stimulate additional production of government-favored commodities by raising incentives to use land and farmer resources on some crops rather than on others.

Farm subsidy programs distort markets by creating false pricing levels for products, creating surpluses of subsidized crops and creating false demand, thus driving overproduction of targeted crops and underproduction of others. These effects are not limited to the domestic market alone.

Perhaps the most unfortunate and illogical manifestation of agriculture subsidies is their harmful effects on developing economies. Developing nations cannot move their economies and their people directly from subsistence farming to designing and manufacturing televisions and airplanes. The first step up the ladder for an economy is from subsistence farming, where the farmer produces only enough to feed their family, to surplus farming, where the farmer produces more food than their family needs.

When a farmer achieves surplus, the farmer can sell the surplus crops to market, thus generating cash. It is the first step in a market based, cash economy. That cash economy creates and sustains a merchant class, which supports a tax base, which can pay for building a country.

Domestic U.S. crop subsidies create false low prices for American crops such as corn and cotton. Coupled with the efficiencies of modern agriculture production, the direct and other forms of crop subsidies put American crops onto the world market at artificially low prices, lower than they actually cost to produce. In the case of cotton, world prices are as much as 20 percent lower than it costs to grow and market the crop due to U.S. cotton subsidies. Even a cotton farmer in West Africa who lives in a hut cannot compete with those prices.

Since that West African farmer is competing head to head with American cotton selling for a lower price than he can produce cotton, even with his extremely low costs, he cannot compete in the cotton market. Since he cannot sell any cotton, he cannot generate any cash from the market. Since he has no cotton sales, he cannot use his cotton sales cash to buy any other goods from the market. Since the farmers have no cash for the market, the merchant class remains constrained. Since the merchant class has very little money, there is very little tax base to grow and develop the country. Consequently, that farmer and his nation stay stuck in a cycle of endless poverty, generation after generation.

American foreign policy views that continuous cycle of poverty as a negative condition that can foster a sense of hopelessness that often leads directly to political instability, revolution and terrorism. As a result, the U.S. pours billions of dollars of cash and food aid into the farmer’s country. When the U.S. aid cash pours out of the sky, it is often pocketed by strong-man leaders, creating a permanent cycle of corrupt regimes. Normally, very, very little direct cash foreign aid ever reaches the people on the ground, people like the cotton farmer.

To make matters worse, the food aid the U.S. provides by the boat load is, of course, free, so it destroys whatever local market price there was for locally grown food crops. Now the cotton farmer, who could not compete with artificially low-priced American cotton, can not even use his land to grow food crops that he could sell at market. Those food prices have also been undermined by all the free American food being distributed.

Usually, the cotton farmer gives up and joins the long stream of migrants heading for the steaming, swarming slums of the cities to seek a better life, leaving his productive land, land capable of producing good crops of market-grade cotton, to bake in the sun.

In our current system, the United States taxpayers pay for direct cash payments to American farmers, the taxpayers pay higher prices for food and other products protected by U.S. trade barriers and the taxpayers pay industry subsidies to distort agricultural markets. As a result of these same policies, farmers, merchants and markets in developing nations are bankrupted, crippled and/or destroyed, leading to U.S. cash and food aid, which engenders permanent corruption, ensconces despots and cultivates terrorism.

Americans pay taxes that fund cash payments to large agriculture corporations to distort markets, Americans pay higher consumer prices for tariff affected goods, Americans pay taxes to support foreign aid to save the rural farmers destroyed by the artificially low prices our domestic subsidies create, Americans pay taxes to purchase food to ship to suffering countries destroyed by our domestic agricultural policies, Americans pay taxes to fund foreign financial aid diverted to the corrupt dictators we create by showering them with money, and, often, Americans pay taxes for the military and covert operations needed to suppress the terrorists that arise out of the same, now crippled, developing economies. Those terrorists are often created from the very farmers destroyed by the agricultural subsidies in the first place.

This logic only makes sense to agriculture lobbyists, short-sighted agricultural interests and American presidents, senators and representatives who sell their influence to the agricultural lobbyists and the interests they represent.

We cannot afford the direct costs of agricultural subsidies, or the short-, medium- and long-term effects those subsidies have on our world. Agriculture subsidies must end.

• Drug War

“You can never reveal my name, but I can tell you that what we’re doing doesn’t work and never will work.” I was speaking with a retired FBI field agent and former FBI / DEA liaison who spent most of his FBI career working with the DEA in South American drug producing countries. He grew up in a U.S. / Mexico border city and started his law enforcement career as a policeman there. “It was open warfare when I was a cop,” he continued. “It was us against the bike gangs, who were making millions moving speed.”

The retired FBI agent’s drug wars with the motorcycle gangs took place decades ago, not all that long after President Richard Nixon declared the “War on Drugs” in 1969. That war has raged non-stop ever since. It is estimated the United States federal government currently spends over $15 billion dollars a year on the drug war and that does not include spending by state and local governments, which carry the primary burden.

Like any other market, the illegal drug market consists of two components: demand and supply. As proven throughout human history, as long as there is a demand, if there is enough profit to justify meeting that demand, there will be a supply.

When the FBI agent referred to “speed,” he was not referring to velocity, he was using the street term for amphetamines and methamphetamines. These illegal drugs have long been popular and widely available in the United States. They are difficult to eradicate, methamphetamine in particular, because it can be produced in an inexpensive portable kit that easily fits in a bathroom. The cost to produce a batch of methamphetamine is very low and its street price is very high, leading to profit margins of thousands of percent, and thus, high motivation to participate in production and distribution.

The 2007 wholesale price for a kilogram of heroin in Afghanistan ranged around $2,405; in Colombia, a kilogram of heroin no. 4 typically sold for $9,992 wholesale in 2006; in the United States in 2007, a kilogram of heroin no. 4 cost an average of $71,200 wholesale. That’s a gross margin per kilogram of between $61,208 and $68,795 depending on the source.

In 2004, a kilogram of cocaine in Colombia typically sold for $1,713; in Peru in 2004, a kilogram of cocaine typically sold for $1,000; in the United States in 2004, a kilogram of cocaine typically sold for $23,000. That’s a gross margin per kilogram of between $21,287 and $22,000 depending on the source.

The United States is the world’s largest market for cocaine and Colombian and Mexican heroin. Obviously, there is enough potential profit to justify the risks inherent in supplying the demand.

And, like any other market, if demand remains constant and you reduce supply, then the price increases.

The U.S. spends most of its money attempting to diminish supply. In fact, since 2002, the portion spent on reducing demand has fallen from nearly half (45.6 percent) of all money spent to about one third (34.3 percent). The current administration continued that trend, lowering the amount spent on demand reduction from 35.1 percent in 2009 to 34.3 percent in the 2010 proposed budget.

In 2010, the U.S. will spend $10 billion dollars at the federal level to reduce the supply of illegal drugs. In the last nine years the U.S. spent $71.6 billion dollars to reduce the supply of illegal drugs. Again, that does not include the money spent at the state and local level.

If the U.S. was successful in reducing the supply of illegal drugs, just as in any other market, prices would steadily increase. However, despite more than $71.6 billion dollars spent to reduce supply, prices for illegal drugs have not increased. For instance, between 1990 and 2003, wholesale prices for cocaine sold in the U.S. fell by two thirds in constant dollar terms (adjusted for inflation), a broad trend that continues today.

In addition, if the money the U.S. spends on the drug war, domestically and internationally, was effective, then the size of the world’s overall market for illegal drugs would shrink, both due to shrinking demand and diminishing supply. The opposite is true. The number of people using and producing illegal drugs has not diminished in absolute or relative terms over the last few decades.

If it has had no material effect on the demand for or the supply of illegal drugs, what has the War on Drugs yielded the United States?

•  
  • Up to half of all police officers convicted as a result of FBI-led corruption cases are convicted for drug-related offenses.
  • In 2007 the individual states spent a total of $6.2 billion dollars a year to incarcerate drug offenders.
  • In 1982 the justice system employed approximately 1.27 million persons; in 2003 it reached over 2.3 million, nearly doubling in size.
  • In the 16-year period 1987-2003, the total of judicial and legal employees grew about 101% to over 494,000 persons.
  • The total number of state and federal inmates grew from 403,000 in 1982 to over 1.4 million in 2003. The number of local jail inmates more than tripled from approximately 207,000 in 1982 to over 691,000 in 2003. Adults on probation increased from over 1.4 million to about 4.1 million persons. Overall, corrections employment more than doubled from nearly 300,000 to over 748,000 during this same period.
  • The number of people in state prisons for drug offenses has increased 550 percent over the last 20 years, from 1989 to 2009.
  • The percentage of offenders incarcerated for drug offenses accounted for the largest percentage of total growth in prison population, 49 percent, between 1995 and 2003.
  • At the retail level, in 2005 the global illegal drug industry was larger than the gross domestic product (GDP) of 88 percent of the world’s nations. At the wholesale level, illegal drugs were a larger market than global exports of ores and other minerals.
  • In 2009, over 15 million people used illicit opiates (opium, heroin and morphine) annually. The value of the global opiate market is estimated at US$ 65 billion.
  • In 2008, an estimated 994 metric tons (2,191,372 pounds) of cocaine was produced in Bolivia, Peru and Colombia, most of it bound for the United States. At typical wholesale prices, that represents about $22 billion dollars in gross margin for the drug cartels for cocaine sales alone.
  • In 2008, an estimated 5,249 metric tons (11,571,945 pounds) of marijuana was grown in the United States out of the estimated 98,681 metric tons (217,552,133 pounds) grown worldwide. At typical wholesale prices, that represents about $23 billion dollars in U.S. sales to the drug cartels, not including what is smuggled in across the borders. 
  • And, despite the efforts of the retired FBI agent fighting the motorcycle gangs along the border early in his career, in 2007 global production of amphetamines and methamphetamines was estimated at 435 metric tons (959,001 pounds), with an estimated 3.8 million regular users in North America alone.

What has the drug war yielded?

•  
  • It has yielded the United States having more people in prison than any other nation; on any given day more than 2 million people are incarcerated in the United States, almost one in every hundred Americans. Over the course of a year, 13.5 million people spend time in prison or jail in the U.S., over four percent of the population. Most of them are there for drug related offenses, including the property crimes committed to purchase drugs.
  • It has yielded a prison recidivism rate of 67 percent of former prisoners rearrested within three years of their release and 52 percent re-incarcerated. After attending “criminal college” in prison, about a fourth of those initially imprisoned for nonviolent crimes are sentenced for a second time for committing a violent offense.
  • It has yielded a global market that pumps more than $8 trillion dollars a year into drug cartels and organized crime. Those same drug cartels have used that $8 trillion dollars a year to destabilize governments in every major drug producing and transshipment country in the world, institutionalizing corruption and undermining human rights and democracy.
  • It has yielded insidious corruption among U.S. federal, state and local law enforcement departments, agencies and personnel.
  • It has yielded U.S. federal, state and local bureaucracies, case loads and expenditures that dwarf those for any other aspect of crime or criminal behavior.
  • It has yielded no material effect on either the demand for illegal drugs or the supply of illegal drugs.

We can no longer afford to enrich the drug cartels and organized crime, as well as undermine governments and human rights in drug producing and transshipment countries.

We can no longer afford to spend more than five times as much on failed drug enforcement as we do on drug treatment, the only thing that can reduce drug abuse, drug crime, arrest and incarceration. We must aggressively intervene with drug treatment to reduce demand in the only sustainably possible way.

We can no longer afford to incarcerate, and then quickly re-incarcerate, almost one percent of our population in an endless cycle of creating, indoctrinating and producing an ever more violent class of criminal.

We can no longer afford to have illegal drugs, something we can never stop, pass unregulated and untaxed through our economy. We must tax illegal drugs, we must regulate illegal drugs and we must create a taxed and regulated international market that directs the money in this market to foreign governments, not foreign drug cartels and organized crime.

We can no longer afford the War on Drugs. The War on Drugs must end.

• Exceptionalism

 “I do not think so much of America. You make movies and music. And you have the big military. After that, what?” This quote is from a German traveler I interviewed in South America. The comment reflects a common attitude amongst many of the Europeans I have known and interviewed.

This comment and outlook is diametrically opposed to the principal of American exceptionalism that has defined U.S. foreign policy and domestic culture since the days of Alexis de Tocqueville. During America’s brief reign at the top of the world’s pecking order after WWII, American exceptionalism has been used as a sword, a shield, a fig leaf and, most recently, been redefined in ways to nearly make irrelevant its orthodox historical meaning.

Historically, American exceptionalism was the principal that the United States was uniquely different from other nations and cultures due to its principles and beliefs, historic origin, natural resources and multi-racial, multi-cultural makeup. Due to the country’s founding by religious puritans, there were often divine attributes and mandates that were intertwined with the concept of American exceptionalism.

In recent history, a neo-exceptionalism has arisen that supplanted the traditional definition of American exceptionalism with a strident, often outright jingoistic version used as a generic rationalization for international unilateralism and cultural arrogance.

American exceptionalism, in both its traditional and neo- variation form the boundaries and foundation for many popular media touchstones in American culture. In music, in folklore, in movies and in television, the principals of America’s superior virtues are introduced at an early age and continuously reinforced throughout childhood and adulthood. Thus, the concept of inherent American superiority is deeply ingrained within its citizens.

There is little to no perceived need to question what is part and parcel of the American experience, and attempts to do so can be branded as both heresy and treason by those who lean toward neo-exceptionalism.

In addition, Americans have very little external perspective on their country or their culture. Only 27 percent of Americans have valid passports. Of those Americans who do travel outside their own country, the majority take short vacation trips to Canada, Mexican and Caribbean vacation resorts and, at a much lower rate, the United Kingdom (U.K.) and France.

Again by large margins, Americans prefer international destinations that require as little cultural adjustment as possible, such as Australia, the U.K., Ireland, Scotland and Canada. Because American vacations are typically limited to two weeks, there is often an attempt to cram as many tourist destinations into as little time as possible. Tourist destinations very rarely offer the opportunity to truly learn about foreign cultures or interact in a meaningful way with the people of other nations. As such, of the Americans who do travel internationally, extremely few have the opportunity to gain a representative outside perspective of their own nation and culture.

Given the deeply rooted and repeatedly reinforced theme of American exceptionalism and the widespread lack of external perspective, it can be no surprise that policies and actions taken under the mantle of exceptionalism are viewed by most Americans as not only justifiable, but just.

However, if you step outside the fishbowl that is the United States and view the concept of American exceptionalism from an external perspective, it is possible to arrive at a different conclusion.

America is indeed unique in many ways. It is alone among nations in being a nation of immigrants. That attribute, in fact, is one of the nation’s primary differentiators and sustainable global competitive advantages. The United States, historically, has been an unsurpassed engine of innovation. That innovation is due, in no small measure, to the mix of cultures and ideas that springs from the “nation of immigrants” characteristic, as well as the free enterprise economic system and the concept, if not reality, of a national meritocracy. The U.S. is also viewed by the people of the world as the fountainhead of opportunity, the single best place where anyone can, with hard work and commitment, achieve success. To a greater or lesser extent, historically, America has also been viewed as the nation that best reflected its bill of rights and freedoms enshrined in its Constitution.

The challenge America faces is that these unique attributes, these characteristics that can form the basis of a moderate, positive form of American exceptionalism, are not those that dominate the popular and current conception of exceptionalism. Instead, in recent form, American exceptionalism has been debased into a variation of jingoistic hyper-nationalism and hyper-patriotism, often rooted in divine rights and mandates.

In the 1950s, things were different for the U.S. than they are now. U.S. Representative Charles Wilson (Democrat, Texas), of Charlie Wilson’s War fame, said of 1950s America, “We were undisputedly the kings of the world, and everybody knew it. We were arrogant sons of bitches.” The world has changed since the 1950s, when the U.S. and the Soviet Union squared off in a geopolitical battle of good versus evil, black versus white, capitalism versus communism. In today’s world, the U.S. is not the rock-solid superpower, the towering, dominating geopolitical, economic and cultural force, or the stable and reliable touchstone that it was then. In the 1950s, it was easy for most Americans to form and sustain a view of the U.S. that was indisputably exceptional in nearly every way.

But this is not the 1950s. The world is very different now, as is the United States. In many ways, the rest of the world has caught up or is gaining rapidly. In many ways, the U.S. is not as inherently exceptional using the same metrics as those which formed the basis of Americans’ exceptional view of their country in the 1950s.

America remains exceptional in that it is the world’s only immigrant nation. America remains exceptional in that it is the world’s hotbed of innovation. America remains exceptional in that it is the best place to achieve prosperity, to reach goals, to achieve a dream. America remains exceptional in that it is still an ongoing experiment in representative democracy of the people, by the people, for the people.

People in totalitarian countries, those recently freed from the yoke of oppression and those fearing the same tend to continue to view America as exceptional for the principles, rights and freedoms embedded in the Constitution of the United States. People in other countries, especially those who have no cultural memory of living under the bootheel of oppression or who have geopolitical reasons to oppose the U.S., often insightfully observe that American exceptionalism is limited to America’s popular media and its military power, viewing the remainder as a hollow shell of boastfulness and hype.

America’s challenges are that its internal cultural view of what forms American exceptionalism, typically the 1950s version, is often at odds with those national characteristics that remain exceptional, and that much, if not most, of the rest of the world holds a very different view of contemporary America’s unique characteristics than the typical American.

Blanket American exceptionalism, especially neo-exceptionalism, leads to an ever more isolated and insular America. An insular U.S. is increasingly prone to both economic and cultural isolationism and over-reaction to perceived international lack of cooperation and hostility. A neo-exceptionalism America is, by definition, predestined to disastrous foreign policies and unilateral actions. 

In an ever more integrated, increasingly level-playing-field world, we cannot afford to be insular, isolated, or over-reactive.

We cannot afford 1950s American exceptionalism, especially neo-exceptionalism. Neo-exceptionalism and 1950s American exceptionalism must end.

 ***

 As citizens, as an electorate, there is a long list of things we can no longer afford, including, but not limited to: 

• Quick-fix solutions
• Short term thinking
• Blind materialism
• Business as usual
• Simple solutions to complex problems promoted by those with vested interests

 While each of these, in and of themselves, could spell our doom as a society, none threaten us as much as abdication.

• Abdication

As a people, we have abdicated governance to a permanent, corrupt ruling class. We have abdicated thought to a craven, hyper-partisan media. And, most damaging of all, we have abdicated personal responsibility in its entirety.

During the long era of prosperity between the end of WWII and the recent great recession Americans couldn’t be bothered with worrying about government and public policy, there was too much fun to be had, leisure time to be enjoyed and money to spend to waste time on how the society was formed and governed. We just didn’t have the time, energy or interest to spare on what was really going on with government and what was really happening with all the billions of dollars that flowed into our state capitals and Washington, D.C. to buy influence. With gadgets, endless forms of entertainment and ever busier lives, who had time to care about such things as who owned our elected representatives and what they did with all that power and influence.

That time is now over. It is no longer a time when things are so good we don’t need to pay attention. The world we face today requires our full and undivided attention, and that includes our government.

We can no longer afford to abdicate governance to a permanent, corrupt ruling class. As citizens, we must reclaim governance.

America has long depended on authority figures to explain how the world works and how it affects them. Whether it was the pastor in the pulpit, the local newspaper editor or the nightly newscaster, Americans trusted their authority figures, especially those in the media, to boil down the issues and challenges of the day into understandable, bite size chunks that were both palatable and easily digested. Unfortunately, that journey has digressed to the point that the only palatable and digestible chunks of information America can handle consist of “It’s not your fault,” and “The other side are idiots.”

As a consequence, America is now left rudderless in the sea of information, with no one at the tiller of the ship and no way to steer it if there was. Americans still turn to the media for guidance, but now find the cupboard stocked only with ultra-partisan fare, tasty only to those who seek one flavor of information: that which tells them they are super-smart for thinking the way they do and that anybody who thinks differently is today an idiot and tomorrow is likely not to be worthy of living.

The media is no longer equipped to interpret and communicate the events of our time. The media is no longer capable of providing unbiased content valid for forming even-handed opinions and policies.

We can no longer afford to abdicate thought to the media. As individuals, we must seek out facts and form our own opinions, make our own decisions and determine our own fates.

There was a time in the United States when personal responsibility was not the exception; it was the social norm in American society. In that era, people were expected to stand up and take responsibility for their actions. In our current times, Americans are most noted for dodging personal responsibility. America is no longer known as a place where people stand up and take responsibility for their actions, now it is known as a place where we sue the people who sell us hot coffee when we spill it on ourselves. America is known as a place where we expect the schools to teach our children values and morals. America is known as a place that no matter what the situation, no matter what the circumstances, it is always somebody else’s fault—somebody else’s responsibility. America is known as a place where it is a newsworthy event, the rare exception, when a person takes responsibility rather than eludes it.

This long, slow slide from responsibility has delivered us to a place where every single American has an adamant and fiery sense of entitlement to what they believe they are guaranteed regardless of if they have done nothing personally to earn it. Every single American believes they are entitled to everything from free speech to clean water to a chicken in every pot, but very few Americans actually put themselves on the line to produce or ensure those things. What Americans do instead is sidestep that line, hedge that line, dance around that line, do anything but step up to that line of personal responsibility for their choices and their actions.

 We can no longer afford to abdicate responsibility. As individuals and as a country, we can no longer evade responsibility for our choices and our actions. We must step up, stand up and take responsibility.

 *****

As a nation and as individuals we need to face reality as it is, not as it was or as we wish it to be.

The coming challenges in this decade require us to make hard choices. The first of those choices must be to keep what we can afford and eliminate that which we can no longer afford.

Choose what we can afford.

*******

Notes:

• Cost of foreign oil is based on average cost of imported oil per barrel at the refinery.
• Full disclosure: I grew up in Iowa, an agricultural state in the United States. Many of my family were farmers or directly or primarily dependent on the agricultural sector of the economy. I currently own farmland in Iowa that is used to produce grain. Members of my family are directly affected by agriculture subsidy programs.

Sources:

• United States Department of Health and Human Services (HHS)
• United States Department of Commerce
• United States Department of Energy
• United States National Institutes of Health (NIH)
• United States Department of Agriculture (USDA)
• United States Department of Justice (DOJ)
• United States Department of State
• United States Government Accountability Office (GAO)
• United States Central Intelligence Agency (CIA)
• Executive Office of the President of the United States
• United Nations Office on Drugs and Crime
• Organization for Economic Cooperation and Development (OECD)
• National Center on Addiction and Substance Abuse at Columbia University
• Commission on Safety and Abuse in America’s Prisons
• OXFAM
• Library of Economics and Liberty
• Center for Responsive Politics www.opensecrets.org
• American Bar Association
• RAND
• New England Journal of Medicine
• American Psychologist
• New York Times

“…our fathers brought forth on this continent a new nation, conceived in liberty, and dedicated to the proposition that all men are created equal.  Now we are … testing whether that nation, or any nation so conceived and so dedicated, can long endure.” – Abraham Lincoln, Gettysburg Address

*******

The United States of America faces an unprecedented combination of challenges in the coming decade. Bankrupt finances, political extremist and ideologues, government gridlock, a decaying infrastructure, dependence on foreign oil, declining education standards and results, loss of credible information sources, public health and geopolitical decline relative to rising powers all promise to change the very nature of life as we know it. 

Consider the following list of facts, and also consider the implications of these facts, which will all combine in the next ten years.

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This year, in 2010, the United States government will borrow $40 of every $100 it spends. The majority of that debt will be due for payment within five years.

If things continue as they are, in 2020 the United States will have a public debt of $21.5 trillion dollars, up from $12.5 trillion dollars today.

By 2020 the annual federal deficit is projected at $1.3 trillion dollars.

Annual interest payments on the public debt in 2020 are expected to reach $723 billion.

If things continue as they are, the public debt will continue to rise, since the United States cannot afford to pay for the programs it is committed to. Those promises that can’t be paid for, unfunded liabilities primarily in the form of Social Security, Medicare and Medicaid, add up to a minimum of $75 trillion dollars.

The Congressional Budget Office (CBO) calculates that entitlement spending (primarily Social Security, Medicare and Medicaid) will grow from 9 percent of Gross Domestic Product (GDP) today to 20 percent in 2025.

In America, more than 10,000 baby-boomers will become eligible for Social Security and Medicare every day for the next two decades.

If health care costs continue to grow at their historical rates, Medicare and Medicaid will double as a share of spending on Federal programs within the next 30 years.

Unless major policy changes are implemented, in just 10 years the United States will spend almost its entire income, every penny taken in via taxes, fees, duties, etc., just paying for Social Security, Medicare and Medicaid and the interest on the public debt. There will be no money left to pay for the rest of government as we know it—everything from the military to milk standards.

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In February 2010, nationally, 4.58 percent of mortgages, 13.6 percent of high yield bonds and 11.2 percent of credit cards were in default.

In September 2009, United States consumers held $917 billion dollars in credit card debt and $69 billion of it was past due.

One of every three American consumers carry credit card balances up to $10,000.

According to the Federal Reserve Bank, 40 percent of American families spend more than they earn.

Between 2007 and 2009 7.2 millions jobs were lost in the U.S., with 1.6 million lost in construction.

Between 1997 and 2009 six million American jobs were lost in manufacturing.

In February 2010 the U.S. lost 36,000 jobs and the national total unemployment rate, which includes discouraged workers and people forced to hold part-time jobs, hit 16.8 percent.

Even as the unemployment rate climbed toward 10 percent, three million U.S. jobs went unfulfilled in 2008 because the U.S. workforce lacked necessary skills.

Nearly one in three American workers will be over 50 by 2012.

More than 26 percent, or one in four, of the nation’s bridges are either structurally deficient or functionally obsolete.

Worn-out water systems leak away 20 gallons of fresh water per day for every American, more than 6 billion gallons of water per day is wasted.

The average dam in the United States is 50 years old.

The cost of bringing the nation’s infrastructure up to adequacy is estimated at $2.2 trillion over the next five years, or twice as much as is now budgeted by all levels of government.

Sixty-eight percent of members of the National Academy of Public Administration surveyed said that the U.S. government was “less likely to successfully execute projects than at any time in the past.”

The United States ranks last of 40 nations in the rate of change in innovation capacity over the last decade.

Rate of Change of Innovation Capacity Prior Decade

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It can cost $1 billion more to build, equip, and operate a factory in the United States than it does outside the U.S., with 70 percent of the cost difference accounted for by lower taxes, and 90 percent of the cost difference explained by government policies (including grants and tax credits), not wages.

Out of 104 nations, in 2009 the U.S. ranked 27th in health, 19th in safety and security, 16th in governance and 7th in education.

In 2008 68 percent of men and 72 percent of women were overweight or obese in America. 

Since 1980, the prevalence of obesity has tripled among school-age children and adolescents.

More than three in ten American children are overweight or obese.

Health effects of obesity include high blood pressure; diabetes; heart disease; joint problems, including osteoarthritis; sleep apnea and respiratory problems; cancer; metabolic syndrome; and psychosocial effects. Most of these conditions are chronic and can more than double the lifetime cost of health care compared to a non-obese citizen.

Most, if not all, of the mid- and long-term cost projections for U.S. health care do not accurately reflect the increased chronic condition costs of America’s overweight and obese population.

Life expectancy in America is below the average for 30 advanced countries measured by the OECD, and the obesity rate in America is the worst among those 30 countries, by far.

If left unchanged, by 2017 U.S. health care spending is projected to reach $4.3 trillion dollars and comprise 19.5 percent of GDP. That means by 2017 $20 out of every $100 dollars spent in the United States will be on health care.

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The U.S. spends more as a percentage of GDP and per capita for health care than any other developed nation while nearly half, 45 percent, of all American patients do not receive the care they have been recommended. In addition, outcomes, quality of care and life expectancy all score lower in the U.S. than the rest of the developed world.

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In August 2008, U.S. steelmakers accounted for only 5 percent of global steel output compared to 49 percent for Chinese steelmakers.

U.S. military spending represented 46 percent of $1.46 trillion global military spending in 2008, compared with 5.8 percent for China, the United Kingdom and France at 4.5 percent and Russia at 4 percent.

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American oil imports since 1981 have nearly doubled, up by 96 percent. 1981 was two years after the second oil crisis that severely affected the U.S. economy and led to repeated calls for energy independence.

The United States currently sends more than $1 billion dollars per day overseas to buy foreign oil.

There are 15,000 registered lobbyists in America who spent $3.5 billion dollars influencing elected officials in 2009.

Including money spent for grassroots organizing, coalition-building, advertising and advocacy on the internet with the $3.5 billion spent on lobbying, the total spent in 2009 on purchasing influence in Washington was about $9 billion dollars.

In 2008, the U.S. had 37 universities in the top 100 and 58 in the top 200. In 2009, that dropped to 32 and 54, respectively.

55 percent of U.S. PhD engineering students are foreign born, along with 45 percent of graduate physicists working in the U.S.

More than 30 percent of American Nobel Prize winners in medicine and physiology between 1901 and 2005 were foreign born.

More than two thirds of Americans are unable to identify DNA as the key to heredity.

Nine out of ten Americans do not understand radiation and what it can do to the body.

One in five American adults is convinced that the sun revolves around the earth.

Among adult Americans, between 1989 and 2007 Americans knowledge of current events dropped by 8.3 percent.

Among adult Americans, 25 percent cannot name any First Amendment rights and 62 percent cannot name the three branches of the United States government.

Of Americans age 18-24, 74 percent believe English is the primary language spoken by the most people in the world; 48 percent cannot locate the state of Mississippi on a U.S. map; 47 percent cannot locate India on a map of Asia; 75 percent cannot locate Israel on a map of the Middle East; 70 percent cannot locate North Korea on a map of Asia; 60 percent cannot locate Iraq on a map and 33 percent cannot locate the direction “northwest.”

Overall, about 67 percent of American high school seniors read below the proficient level.

Fewer than half of Americans over age 13 read a book in the last year.

Romance novels are the largest share of the American book market.

One in seven American adults cannot read. That equates to 14 percent or 32 million U.S. adults who are illiterate.

In the Los Angeles city school system during 2008-2009, 58 percent of fifth-graders were reading below their grade level and 47 percent could not perform at their grade level in math.

American children aged 2-5 spend about 25 hours watching live television and over 32 hours a week on average in front of the TV screen.

American children aged 6-11 spend about 22 hours watching live television and over 28 hours a week on average in front of the TV screen.

American adults spend an average of 8 hours per day exposed to television, 56 hours per week

*******

But a list of factoids does not tell the whole story. While possibly illuminating, they lack personal perspective. As such, consider the following series of quotes, and the implications of these quotes, all of which will combine in the coming decade:

“The physical infrastructure of big East Coast cities was mainly built by the 1880s; of the industrial Midwest by World War I; and of the West Coast by 1960. It was advertised to last 50 years, and over-engineered so it might last 100. Now it’s running down. When a pothole swallows an SUV, it’s treated as freak news, but it shows a water system that’s literally collapsing beneath us.” – Stephen Flynn

“After almost a century, the United States no longer has the money. It is gone, and it is not likely to return in the foreseeable future … The American standard of living will decline relative to the rest of the industrialized and industrializing world … The United States will lose power and influence.” – economists J. Bradford DeLong and Stephen Cohen

“America needs a government as good as its people.” – former President Jimmy Carter

“Year by year special-interest groups inevitably take bite after tiny bite out of the total national wealth. They do so through tax breaks, special appropriations, what we now call legislative “earmarks,” and other favors that are all easier to initiate than to cut off. No single nibble is that dramatic or burdensome, but over the decades they threaten to convert any stable democracy into a big, inefficient, favor-ridden state.” – paraphrase of Mancur Olson, author, economist and social scientist

“153 state or federal [elected] positions in California were at stake in the 2004 election. Not a single one changed party.” – Troy Senik, author and former presidential speechwriter

“In terms of size, speed and directional flow, the transfer of global wealth and economic power now under way — roughly from West to East — is without precedent in modern history.” – Thomas Fingar, Chairman of the National Intelligence Council (NIC)

“I don’t think that America’s political system is equal to the tasks before us… Our [system] is great for distributing benefits but has become weak at facing problems. I know the power of American rejuvenation, but if I had to bet, it would be 60–40 that we’re in a cycle of decline.”  – Dick Lamm, former three-term governor of Colorado (Democrat)

“If Washington continues to thumb their nose at the American people, you know, who knows what might come out of that?” – Texas governor Rick Perry (Republican) regarding Texas secession from the United States

“Whenever you have just the furthest left elements of the Democratic party attempting to impose their will on the rest of the country—that’s not going to work too well. For [the Democratic party left,] it may take a political catastrophe of biblical proportions before they get it.” – U.S. Senator Evan Bayh (Democrat, Indiana)

“He was Judas to the Republican Party in the state of Florida and across the country.” – Robin Stublen, co-state coordinator for the Florida Tea Party Patriots, regarding moderate Republican Florida governor Charles “Charlie” Crist

“To those people who are pursuing purity, you’ll become a club not a party. Conservativism is an asset. Blind ideology is not.” – U.S. Senator Lindsey Graham (Republican, South Carolina)

“Our companies and entrepreneurs are matchless in their power to adapt. We lead in many categories the private economy can handle by itself. But where you need any public-private coordination, we’ve become handicapped. I worry that our companies can adapt, but our [political] system can’t.” – Robert Atkinson, director of the Information Technology and Innovation Foundation

“Senior foreign government delegations still frequent the U.S. on technology visits, but they come increasingly infrequently to the U.S. to learn about innovation policy; there’s much more for them to learn in Europe and Asia.” – Greg Tassey, senior economist for the U.S. National Institute of Standards and Technology (NIST)

“We are the United States of Deferred Maintenance. China is the People’s Republic of Deferred Gratification. They save, invest and build. We spend, borrow and patch.” – Thomas Friedman, columnist and author

“The financial crisis is a major geopolitical setback for the United States and Europe… [It will] accelerate trends that are shifting the world’s center of gravity away from the United States.” – Robert Altman, former Deputy Treasury Secretary

“We are willfully making ourselves stupid. When was the last time we faced up to a major national problem? We would do well to focus on the issue of public paralysis.” – Ralph Nader, former third party presidential candidate, consumer activist, author

“This is a phenomenon that goes beyond the military sphere to the political and economic sphere. I think it would be easy for common-sense Americans to draw up a list of big things that would seem to demand concerted effort. Deficits are too big. Health costs are unacceptable. Oil. And yet we have a political system that seems to be constantly consumed with trivial things. We cannot seriously grapple with the big issues. Tactics consume strategy.” – Andrew Bacevich,  West Point graduate and career Army officer who now teaches at Boston University

“Ronald Reagan managed to equate criticism with anti-Americanism, and render unintelligible bad news about America.” – Rick Perlstein, author, historian and journalist

“Ideologues hold stoutly to a worldview despite being contradicted by what is generally accepted as reality. The offspring of ideology and theology are not always bad but they are always blind. And that is the danger: voters and politicians alike, oblivious to the facts.” – Bill Moyers, journalist, former White House press secretary

“Governing institutions always lag behind the social exigencies of any era; and in periods of rapid change… the gap widens between society’s needs and the institutional capacity to meet those needs.” – paraphrase of Thorstein Veblen, author, sociologist and economist

“Through the country’s history, government has had to function correctly for the private sector to flourish. John Quincy Adams built the lighthouses and the highways. That’s not ‘socialist’ but ‘Whiggish.’ Now we need ports and highways and an educated populace.” – Kevin Starr, author, historian, professor

“America’s ignorance of the outside world is so great as to constitute a threat to national security.” – Strategic Task Force on Education Abroad

“Part of the mind-set of pre-Communist China was the rage and frustration of a great people let down by feckless rulers. Whatever is wrong with today’s Communist leadership, [domestically] it is widely seen as pulling the country nearer to its full potential rather than pushing it away. America is not going to have a Communist revolution nor endure “100 Years of Humiliation,” as Imperial China did. But we could use more anger about the fact that the gap between our potential and our reality is opening up, not closing.” – James Fallows, writer, journalist, former presidential speech writer

“The world has no leadership. The U.S. was the last resort and hope for all the nations. Today, we have lost that hope.” – Lech Walesa, former president of Poland and leader of Poland’s independence movement from the Soviet Union

“Our long-term simulations show that absent policy changes the federal government faces an unsustainable growth in debt. The longer that action to deal with the federal government’s long-term fiscal outlook is delayed, the greater the risk that the eventual changes will be disruptive and destabilizing.” – United States Government Accountability Office (GAO) [emphasis added]

“I am a little worried that by the time we wake up to the crisis we will be in the abyss.” – Paul Otellini, President and CEO, Intel

 *******

As you can see from these facts and quotes, the United States faces a set of challenges that, taken together, arriving simultaneously, threaten the ongoing viability of the country.

Facing a period of extraordinary challenge is nothing new for the United States. The nation has faced challenges before and overcome them.

What makes this next decade unique is that the country faces major existential challenges from multiple sources, all arriving at the same time, at a time when the country is perhaps less equipped to deal with them than at any other point in its history.

Government
Politically, the nation is at a standstill. Its ruling class has proven, through its pervasive corruption and extremist driven gridlock, that it is incapable of effective governance, long ago trading power and personal riches for any sense of civic responsibility and personal integrity. Government is at a standstill, held hostage by fringe ideologues from both ends of the political spectrum.

The underlying political system of exchanging money for influence that the ruling political class has inculcated and nurtured has created an environment universally corrosive to anyone who enters. People who are elected to local, state and national offices may start out well meaning and honest, but they quickly become introduced to the realities of politics in America in which there is only one goal—money.

The United States spends more on buying influence with politicians ($9 billion) than it does for flood control and coastal emergencies ($30 million); mining ($146 million); training law enforcement ($278 million); health care research and quality ($611 million); the forest service ($757 million); military family housing ($1,822 million); technology innovation ($80 million); adult education ($612 million); radioactive waste management ($197 million); elderly housing ($274 million); fighting organized crime ($579 million); veterans employment and training ($262 million); the Peace Corps ($446 million); pipeline and hazardous materials safety ($174 million); financial crimes enforcement ($100 million); veterans cemeteries ($251 million); polluted land assessment and cleanup ($138 million); aeronautics, aerospace and science education ($146 million); science research equipment and facilities ($165 million); small business loans ($169 million); social security fraud and abuse ($106 million) and social innovation ($60 million) combined ($7.403 billion).

Given these priorities of the political class, with the nation spending more on buying politicians than buying government products and services, it is clear who our elected representatives and their parties serve—themselves.

Fewer than half of Americans trust government, more than 80 percent disapprove of the job congress is doing, 83 percent are dissatisfied or angry with government and more than 93 percent believe there is too much partisan fighting between the two ineffective, detached and self-serving political parties. There are loud voices from many quarters, left, right and center, echoing the message that the current political system and its members have proven incapable of governing the country and that the elected representatives of the United States are disconnected from honesty, integrity, ethics, the country and its people.

Tellingly, for the first time in modern history, there are reports from developed nations of concern of “political instability” in the United States.

If we don’t fix government, if we don’t create a system that separates money from politics, if we don’t find people who are honest enough and capable enough to govern, it is game over.

Finances
Financially, the nation is effectively bankrupt. The United States government has spent more money that it earned for 47 out of the last 55 years. Consequently, it is in debt up past its eyeballs; and, worse yet, it is in hock to its major geopolitical rivals, who now control America’s fate. About one in three dollars of U.S. foreign debt is held by China, drug cartels and oil producers. China alone holds more than $895 billion dollars in U.S. debt, more than 24 percent of the total held by foreign nations.

“China is now the largest creditor nation to the United States,” noted Victor Gao, a former top official in the Chinese foreign ministry, in a recent CNN interview. “Just imagine if China buys less of the Treasury bonds or stops buying the Treasury bond for a couple of months.” The outcome of even a couple of months diminishment or suspension of China buying America’s IOUs would cripple the U.S. economy and destroy the dollar. It doesn’t take Einstein to figure out who is the puppet and who is holding the strings in this relationship.

Things won’t get better financially any time soon. If things stay the way they are, in seven years the U.S. will be spending 20 of every 100 dollars on health care. Even more ominous, the United States has no way to pay for its major social entitlement programs: Social Security, Medicare and Medicaid. Unless major cuts are made to the entitlement programs, huge tax increases are levied, or both, in 10 years the country will be spending all of its revenues, every last penny of taxes, duties, fees, etc., to fund those entitlement programs and pay the interest on the public debt, leaving nothing left to pay for the entire rest of the government (defense, law enforcement, safety, education, science, etc.).

If we can’t gain control of health care costs, if we can’t come to grips with our spending and stop racking up more and more debt, if we can’t get our entitlement programs under control, in ten years it is game over.

Geopolitics
Geopolitically, America’s dominant position on the world stage is being displaced by rising global superpowers such as China and resurging past empires such as Russia (Soviet Union) and Iran (Persia).

China is America’s primary debt holder, and, as such, has the power of life and death over the United States. Should China simply stop buying further IOUs from the United States or flood the market with even a portion of its U.S. debt holdings, the U.S. economy and the dollar would collapse. While that collapse would cost the Chinese most of their nearly trillion dollars in U.S. debt holdings, even if they lost every penny of their investment, they could crush the United States and become the world’s sole superpower for less than it has cost the U.S. to fight the Iraq and Afghanistan wars. China would become the world’s sole superpower for a relatively bargain price, all without firing a shot.

Asians in general, and the Chinese in particular, have a very different perspective on history than the United States. Asians plan in periods of 10, 50 and 100 years. Americans plan in periods of 3 months and two year election cycles. Asians view history in periods of hundreds and thousands of years. Americans view history in periods of 30 minutes, the news cycle, and four years, a presidential term.

Due to this difference in perspective, it can come as a surprise to Americans that Asia, predominantly China, was by far the world’s largest economy for much of the last two millennia. As pointed out by Chris Patten, the last British governor of Hong Kong, China was the globe’s top economy for 18 of the past 20 centuries. While Europe stumbled through the Dark Ages and fought disastrous religious wars, while North America was populated by indigenous peoples, while the Islamic world peaked and declined, Asia and China created the largest economies and the highest standards of living in the world.

 
From our perspective here within the United States fishbowl we tend to think the world is, should be, and always will be, as it has been since we’ve been alive. However, from the Chinese perspective, the idea of China dominating the world is not a change in reality to something unusual; it is merely the return to what always was and always should be.

China’s current geographical area

China’s recent geographical area

Maximum territory during the Mongol Empire
 

The world outside the borders of the United States continues to evolve rapidly. Due to the growth and development of other nations, it is inevitable that the U.S. will no longer dominate relative to their growing strengths and capabilities. Just as the first tree that grows towers above the newer growth, as the surrounding saplings grow to maturity, they stand equal with the initial tree. The return to global power and influence of historically major empires such as China and Russia (Tsarist Russia and the Soviet Union), and to an initially lesser extent, Iran (Persian) and Turkey (Ottoman), means the U.S. must adapt to a new role and new relationships with a multilateral world of countries with current or soon-to-be peer level economies and capabilities. This does not mean that the U.S. must decline relative to itself, but it does mean that the U.S. must find within itself an identity and purpose relevant to and compatible with a new world of multiple major geopolitical players.

If we cannot find a way to transition into a new geopolitical order as one of many powerful nations, if we cannot find a way to get out of debt to our major global competitors, if we cannot find a way to form and sustain effective coalitions, it is game over.

Education
Educationally, in 2006 American 15 year old students ranked 23rd in science and 32nd in math among developed and developing countries on the OCED Program for International Student Assessment (PISA) education skills survey. In 2009 American fourth graders were surpassed by five countries that placed behind the U.S. in earlier reading tests.

From 1990 to 2006, total expenditures per student in American public elementary and secondary schools rose 31 percent in constant dollars. That 31 percent increase in spending bought a change of 38 percent to 33 percent of fourth graders reading at or below basic level, 31 to 26 percent of eighth graders reading at or below basic level, and more than one out of four freshmen who never graduate high school, a drop out rate of 27 percent nationally. 

In some quarters those statistics, a range of one quarter to one third of fourth and eighth graders who cannot read above a basic level and more than one quarter of high school students dropping out, were a cause for celebration and accolades. Others were less sanguine.

U.S. Secretary of Education Arne Duncan perhaps said it best, “Our students have stagnated educationally, putting our long-term economic security at risk.”

If we cannot find a way to educate our young to produce effective, intelligent, flexible, problem-solving workers and citizens, it is game over.

Information
All of these problems coming to a head simultaneously would perhaps be less of an existential threat if the American public could meet the requirements of a representative democracy: an engaged, educated and informed electorate.

Given the duplicity, greed and incompetence of the ruling class, it is extremely challenging to be engaged. Considering the ongoing failure of the education system to produce capable citizens fully informed of how the world and their government works, one is hard pressed to make a case for educated. And lastly, though we are literally drowning in information, the electorate is perhaps less effectively and accurately informed than at any time in the nation’s history.

In 2009 there were more than 40,000 newspaper jobs cut. Since 2001, roughly 25 percent of the industry’s news workforce has been lost. This is not just an abstract issue, it can directly affect the nation on a societal level. For instance, Mary Schapiro, chairperson of the U.S. Securities and Exchange Commission (SEC) said, “It’s an absolute worry for me because I think financial journalists have in many cases been the sources of some really important enforcement cases and really important discovery of practices and products that regulators should be profoundly concerned about.”

As what remains of journalism that watched over politicians, financiers, defense department contractors, local governments and business withers away, it is being replaced by new forms of information procurement and dissemination. In addition to “citizen journalism” created by people with no training in discerning facts from rumor, whose level of perceived credibility is typically directly proportional to their level of bombast, there is now “journalism” based on stories assigned to yield maximum popularity and advertising sales. 

For instance, AOL is launching “the newsroom of the future” in which reporters are assigned stories based on what is popular on the web and what will attract the most advertising. According to Business Week, stories are frequently assigned to explore such popular topics as “How to Open Champagne.” There are plans to pay reporters bonuses based on web page views instead of the quality, accuracy, relevance and impact of the content they create. Given a choice between creating a story on a Hollywood celebrity guaranteed to attract millions of page views and a story on congressional bribery, there is little doubt which story a reporter trying to make their rent and car payments will choose.

What this means is that the average American will be left with the info-celebrities and shrieking ideologues that populate television; the write-what’s-popular web based “journalism;” and “citizen journalism”  consisting primarily of hyper-partisan zombies repeating the same rumors, distortions, lies and half-truths they picked up from another hyper-partisan blog. Given that mix, it is extremely challenging, if not essentially impossible, for a voter to stay informed in anything close to a non-partisan, balanced manner.

While the entire world’s collection of information and up-to-the-second news feeds are as close as the average American’s smartphone, accurate, unbiased, unfiltered, un-agenda-ed, fact-based information is the rarest of all commodities. Like a castaway’s water on a desert island, we have never been surrounded by more information only a touch away, with more of it completely useless and counterproductive.

If we cannot find a way to keep ourselves informed and educated via unbiased, accurate, fact-based, reliable information sources that we can easily access and identify in the overwhelming chaos of available information, and use those information sources to make effective and informed decisions about our lives and our nation, it is game over.

Leadership
For at least 450 years, Europe dominated the world, moving from systematic rape and plunder of the globe to repeated, all encompassing, internecine attempts to destroy each other along with the known world. Once the Europeans finally burned themselves out, literally and figuratively, the United States spent the last half of the 20th century, its brief moment of world leadership, degenerating into a political pig sty and shallow materialism. All of the good things America did in the world during that period, from defending allies, such as winning the Cold War, to feeding the world, such as supplying India with donated food after its independence, were outweighed by America’s long spiral down into political ineffectiveness, cultural arrogance and profligate spending.

As former U.S. Representative Charles Wilson (Democrat, Texas), of Charlie Wilson’s War fame, said of the 1950s, “We were undisputedly the kings of the world, and everybody knew it. We were arrogant sons of bitches.”

That attitude and its manifestations did not pass from the memory of the world along with the era of Elvis. American foreign policies reflecting that ethos are long remembered, and remain a raw nerve for other nations. It is telling that while people in the rest of the world nearly uniformly admire and like Americans, many are hostile to U.S. government foreign policies. The legacy of “kings of the world; arrogant sons of bitches” as national foreign policy still haunts today.

Even as the U.S. carried that burden into the current era and perpetuated it by creating new versions of the attitude and foreign policies to match, the world continued to change around us. Although American society and its leaders largely assumed that everything outside the borders had remained static since Ozzie and Harriet and that the outside world largely remained in fealty, in reality, the rest of the world had rapidly advanced and changed. Those advancements and changes gave rise to a set of new challenges that the United States was dramatically unprepared for on nearly all levels. Most importantly, those decades of predominantly willful “ignorance is bliss” outlook about the rest of the world led the United States to elect and perpetuate a governing class that was entirely incapable of leading the nation in a changed, post black-and-white-television world.

The defining moment of America’s post-war world and national leadership was the greatest missed opportunity for vision and leadership in modern political history. Immediately after 9/11 the United States, from political ruling class to nearly every single citizen, stood united and ready to take on any challenge. The nation was briefly open and receptive to fundamental change and stood poised to adopt and push forward a Manhattan project, an Apollo moon shot, a defining transformative initiative of our age. Instead of being challenged to accomplish something meaningful, something ambitious, something dramatic that would fundamentally improve the country and its people for today and the future, such as energy independence, then President George W. Bush asked instead for us to go shop.

There could be no better example of the void of leadership, vision and capability of the governing class of the United States, regardless of political party, regardless of ideology, than that mandate: go shop. There could be no better illustration of what passes for both political leadership and what is guaranteed to be appealing to the American people: go shop. There could be no better lesson in the political class’s choice between challenging goals that move the nation forward and meaningless populist drivel enticing to the masses: go shop. There could be no better sample of what is viewed among the ruling class as capitalizing on a once in multiple generations opportunity for a fundamental leap forward for the nation, the chance to leverage a brief moment of unity and potential sense of national purpose: go shop. There was a tiny window of opportunity to elevate the national purpose of America from materialism to a higher plane, such as guaranteeing a viable future for our children and grandchildren. Instead, the political class, the ruling class, trotted out the best they could muster: go shop.

If we cannot instill, identify and develop leadership, leadership capable of understanding the world as it is, not as it was or as we wish it to be in some utopian form; if we cannot bring forth leadership with vision, courage and integrity, leadership willing and able to lead the nation for the sake of leadership alone; then it is game over.

A Perfect Storm
In the coming decade, the United States faces a perfect storm of financial disruption, geopolitical tectonic shifts, technology transformation, energy transition, public health, workforce education, ideological extremism, lack of leadership and pervasive political corruption and ineptitude.

It is clear from their track record over the last 50 years that the current political class of the United States is not equipped with the ethics, integrity, intelligence and skills required to take on, meet and overcome these challenges.

Countless times over the brief history of the United States the people of the country have proven themselves capable of rising to any challenge, especially if given even a modicum of leadership. It remains to be seen if in its current state of health, education, awareness and priorities the people of the United States can set aside the trivial distractions of their lives and pay attention long enough to meet and overcome this decade’s existential challenges for their country.

Abraham Lincoln, perhaps more than any other politician of his time or since, recognized that the United States is not the permanent fixture that we assume it to be simply because it’s always been the way it is during our lifetimes. Lincoln recognized that the U.S. was a novel and new experiment in citizen self-government, in representative democracy. He perceived that the United States is much more fragile, much more brittle, than we consider it today. He also realized that without tremendous levels of ongoing effort by both its citizens and its elected representatives, the republic would founder.

Perhaps Lincoln never forgot the words of his predecessor as President, John Adams, who said, “Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide.”

It remains to be seen if we as a people have the foresight and fortitude of Lincoln, who fought for and preserved the United States, or if we allow our corrupt, incompetent ruling class and a distracted, disinterested population to drive us to the collective societal suicide of Adams.

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“… that government of the people, by the people, for the people, shall not perish from the earth.” – Abraham Lincoln, Gettysburg Address

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Sources: 

• United States Government Accountability Office (GAO)
• United States Treasury
• United States Department of Agriculture (USDA)
• U.S. Department of Health and Human Services (HHS)
• U.S. Department of Education
• Congressional Budget Office (CBO)
• Office of Management and Budget (OMB)
• Federal Reserve
• Centers for Disease Control and Prevention (CDC)
• National Science Foundation (NSF)
• United Nations
• Organization for Economic Cooperation and Development (OECD)
• RAND Corporation 
• University of Chicago
• University of Texas 
• Stanford University
• American University’s Centre for Congressional and Presidential Studies
• Pew Research Center 
• Center For Responsive Politics www.opensecrets.org 
• New York Times
• San Jose Mercury News
• Asia Sentinel 
• Journal of the American Medical Association
• Foreign Policy
• The Economist
• The Atlantic
• U.S. News and World Report
• Business Week 
• Associated Press
• POLITICO
• Charlie Wilson’s War, by George Crile
• The Age of American Unreason, by Susan Jacoby
• American Society of Civil Engineers
• Information Technology and Innovation Foundation
• Legatum Institute
• Bowker
• China Mining Federation 
• Stockholm International Peace Research Institute
• NAFSA Strategic Task Force on Education Abroad
• Nielsen Company 
• National Geographic Society 
• National Endowment for the Arts 
• National Constitution Center 
• Romance Writers of America
• Gallup
• Roper Public Affairs
• NBC News-Wall Street Journal poll
• ABC News
• CBS News 
• CNN

When you get right down to it, as taxpayers, we purchase a set of goods and services from the U.S. government. In exchange for our taxes, fees and surcharges we get a campsite in a national park, an interstate highway system, a (supposedly) regulated financial system, an Army, Navy, Air Force and Coast Guard, a Border Patrol, CIA, NSA, FBI, DEA, TSA and countless other three letter acronym agencies, federal standards for everything from allowable amounts of insect parts in hot dogs to airplane tire performance and too many other goods and services to include in this post. We take most of these goods and services for granted, as we do how those goods and services are paid for.

Every one of those goods and services comes from one of the boxes in the illustration. What we don’t think about is how we buy those boxes.

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In the case of the United States government, we buy our boxes in two ways:
1. Government revenue via interest income, taxes, fees, duties, and other payments
2. Loans from willing lenders to cover the difference when what the government spends (outflows) exceeds what the government takes in (inflows)

When an individual or a family spends more than they earn, they typically cover the difference via credit cards or, more rarely, through loans. Those credit card debts are secured by the card holder’s promise to pay back the debt, basically an IOU. Formal loans usually require collateral, a tangible asset that will be seized if the loan is not repaid, such as a house or a car. In contrast, the U.S. government does not put up any collateral when people loan it money, it just issues an IOU in the form of a bond or Treasury note. Both of those instruments promise that we, the American taxpayers, will repay that loan along with interest. So far, the collective promise of repayment by the American taxpayers has been viewed as a valid, investment class promise by everyone in the world who has funded our profligate ways by buying U.S. government IOUs. As long as they keep believing we’ll eventually repay them and keep loaning us money, we keep spending more than we earn.

The United States government has spent more money that it earned for 47 out of the last 55 years. In each of those 47 years, the U.S. has needed to borrow the difference between its outflows, what we as a nation spent, and its inflows, what the nation took in. That difference, that delta, is commonly referred to as the deficit.

The U.S. government 2010 fiscal year deficit is projected at $1.56 trillion, or 10.6 percent of gross domestic product (GDP – the total value of goods and services produced in our economy in a year). That means in the 2010 budget cycle we are spending $1.56 trillion more dollars that we are taking in via interest income, taxes, fees, duties, and other payments. The United States has not seen deficits above 10 percent of GDP since World War II.

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When the projected $1.56 trillion dollar deficit (the red area) is overlaid on the 2010 budget, you get a visual idea of how much we can actually afford and how much we need to borrow to fund our collective lifestyles.

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When the projected $1.56 trillion dollar deficit is applied to the 2010 budget, you can see that the portion of government spending that we can actually afford leaves such basics as health, education, training, veterans benefits, international relations, natural resources, transportation, energy, commerce and administration unfunded, to say nothing of the interest payments on the $12.394 trillion national debt we already owe.

Who is willing to loan this country, which is obviously incapable of living within its means, $1.56 trillion on top of the existing $12.394 trillion we already owe? Basically, the same people and methods used for the last 55 years.

U.S. debt is held by American individuals and companies, U.S. government controlled entities, foreign nations and foreign individuals and corporations.

You will note the graphic reflects that in 2009 22 percent of U.S. debt was owned by the Social Security Trust Fund. Because there are so many people in the Baby Boomer generation, while they were working and contributing to the social security system that system ran huge surpluses. Those surpluses were supposed to be held in a trust fund to pay the bills when those same massive numbers of baby boomers retired. Unfortunately, the social security trust fund was accessible by congress, whose members either spent it outright on various boondoggles and earmarks, or used it to cover part of the deficit by purchasing the government’s IOUs. In addition to social security trust funds, surplus funds from other retirement trust funds controlled by the government, such as the retirement trust for government employees, were used to purchase government debt IOUs, which total 14 percent of U.S. debt holdings.

All told, 36 percent of U.S. IOUs were purchased by retirement trust funds that will now be short that money when it is needed to pay their retirees. In order to pay the money back to the trust funds, along with the interest owed, the American taxpayers will need to pony up the money. In essence, the taxpayers put the money away for retirement via social security and withholding taxes, only to have that money misappropriated by congress to cover the deficits of the U.S. government. Now, when the money is needed, the very same taxpayers, or more precisely, the taxpayers’ tax paying children and grandchildren, will need to pay that same money again to cover the IOUs, along with interest. The retirement money was originally paid by the baby boomer retirees, it was stolen by congress to cover the deficit and turned into IOUs, now the retirees’ children and grandchildren will need to pay off the IOUs to pay for their parents’ and grandparents’ retirement. Consequently, it will cost the American people more than double to pay for the retirement of everyone affected in the social security and government pension programs. This logic only makes sense if you are a Unites States Representative, Senator or President.

Among the foreign holders of U.S. debt, China and Japan lead with a total of $1.524 trillion dollars, or 42.2% of the $3.614 trillion total outstanding U.S. government debt held by foreigners. Other top foreign holders of U.S. debt include the United Kingdom (3rd with $302.5 billion, or 8.4%); the oil exporting countries (4th with $186.8 billion, or 5.2%); and the Caribbean Banking Centers (5th with $184.7 billion, or 5.1%).

In addition to the foreign governments, an unknown amount of U.S. debt categorized as owned by “individuals” is owned by foreign nationals, ranging from despots diversifying their portfolios from their Swiss bank accounts to investment funds to shopkeepers.

At the national level, the system is a basically a barter exchange. The U.S. sends billions of dollars per day overseas in exchange for oil, illegal drugs and manufactured goods. This leads to a huge difference between the value of what we sell other nations compared to what we buy from them. This difference in trade, this delta, is commonly referred to as the trade deficit. In 2009 the U.S. trade deficit was $380.66 billion, of which $226.83 billion was with China (both totals were the lowest in years due to the massive economic recession).

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For the last 55 years, those trade deficit nations have seen fit to turn many of those dollars around and used them to purchase U.S. government debt.

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This money laundering system has served as a bottomless ATM for the U.S. We’ve spent most of the last 55 years living beyond our means and borrowing against our assets, in this case, an asset that is nothing more than a promise that the taxpayers would repay the IOUs. In that sense, it’s very similar to how Americans lived during the recent real estate bubble, when many U.S. homeowners treated their homes like limitless ATMs, continually leveraging that asset via refinancing their mortgages to fund their spendthrift lifestyles. As we all know, that idea worked great until the real estate bubble burst.

Will the U.S. national debt IOU bubble ever burst in a similar fashion?

For it to burst, the nations, organizations and individuals selling us oil, illegal drugs and manufactured goods who have been willing to buy our IOUs would need to lose faith in our ability, or stated more accurately, our children’s and grandchildren’s ability to repay those IOUs. If the people covering our deficits ever lost faith, and foreign nations, organizations and individuals stopped buying our U.S. government IOUs, interest rates would soar (to make the IOUs more attractive by providing high returns) and the dollar would collapse, along with the U.S. economy.

If other nations, organizations and individuals stopped buying the U.S. government’s IOUs, we would have two choices. We could either double taxes, fees, duties and other sources of income to make up the $1.56 trillion dollar deficit or we could shrink government spending until all the boxes of government spending fit into the area we can afford to fund ourselves.

If you think doubling taxes, or, in the American way, taxing the rich to pay for the deficit, is the best approach, consider the following. If you doubled taxes only on the rich, they would be taxed at 70 percent of their income. Since only taxing the rich would probably not provide enough income to cover the $1.56 trillion dollar deficit, you would probably need to raise that rate higher, perhaps to 80 percent or more. In states that add state income tax, such as California, the rich would be paying more than 90 percent of their income in taxes. Historically, such systems have not proven effective for the overall economy. For example, top marginal rates in the United Kingdom exceeded 80 percent in the 1970s and their economy nearly ground to a halt. And besides, individual income taxes make up only 45 percent of U.S. government income, so it may not even be possible to make up the deficit regardless of how much you tax the rich.

Since doubling taxes, even if only on the rich, probably won’t work, we would need to dramatically reduce government spending to fit within a box we could actually afford.

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As you can see in the illustration, if you shrink the federal government down to where it can fit within a box the American taxpayer can actually afford to buy, some of the departments and programs start to get very small. We could end up with one guy with a cell phone and a laptop in charge of infectious diseases or an entire Navy rusting at the docks because we couldn’t afford to fuel the ships or pay the sailors to use them. In order to make this scenario work, as a nation, we would need to make very tough choices. That means our elected representatives would need to make very hard choices with what’s best for the nation being the only criteria. OK, so that’s obviously not going to happen.

Of the two options, doubling taxes, fees, duties and other sources of revenue would cripple the economy while cutting government spending enough to shrink all the boxes to fit into the area we can afford to fund would require decision making and leadership our current political ruling class is incapable of executing. If we could somehow implement either option or a blend of the two, it would be the end of living beyond our means and the beginning of an entirely new form of the United States of America.

But we don’t have to worry about that as long as other nations, organizations and individuals continue to be willing to buy our U.S. government IOUs in exchange for a promise that the American taxpayers, their children and grandchildren will repay the debt.

And that gravy train will never stop, right?

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News Item: China liquidated $34.2 billion of US Treasury securities in December 2009, initiating their previously communicated plan to “diversify” their more than one trillion dollars worth of primarily U.S. dollar denominated hard currency reserves.

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Notes:

• United Kingdom includes Channel Islands and Isle of Man, well known offshore tax havens used by people and organizations seeking to hide and disguise assets.
• The oil exporting countries include Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria.
• The Caribbean Banking Centers are nations often used as offshore money laundering operations for the drug cartels and other criminals and tax evaders: Bahamas, Bermuda, Cayman Islands, Netherlands Antilles and Panama and the British Virgin Islands.
• Foreign debt based on estimated foreign holdings of U.S. Treasury marketable and non-marketable bills, bonds, and notes reported under the Treasury International Capital (TIC) reporting system are based on annual Surveys of Foreign Holdings of U.S. Securities and on monthly data.

Sources:

• United States Treasury
• Internal Revenue Service
• Tax Policy Center of the Urban Institute and Brookings Institution
• MSNBC
• Daily Mail
• New York Times
• US Debt Clock.org
• Financial Times
• Reuters
• Wall Street Journal
• Traxel.com