Americans, Beware of the Economic Doom!

January 10, 2010

By Saeed Qureshi

The statistics are hair-raising. The national debt of United States currently stands at $ 12 trillion which if divided on a population of 300 million comes roughly to $40,000 for every man, woman and child in America. The budget deficit for the year 2009 is estimated to be an all time high at $1042 billion. The cost for both Iraq and Afghanistan war in 2010 would be around $ 1046 billion. In 2014 America’s debt-to GDP ratio would reach 108 percent. By 2019 payments on the federal debt would rise to $799 billion.
China and Japan are the two biggest creditors of United States, thus far holding 798 billion and 751 billion worth of U.S. Treasury securities. The trade deficit that was zero in 1991 soared to 763 billion in 2006. If this trade deficit is not checked, by 2030 it will rise to 15 percent of the GDP or $ 5 trillion annually. By November 2009 the mortgages of 16 million Americans were upside down. So far 100 banks have close their business, 416 are at risk of bankruptcies. By 2013, the projected losses on account of bounced real estate loans will be 600 billion. The acute economic downslide places the United States in a risky situation of losing reserve currency status of dollar as well as its superpower status.
There is growing loud thinking that the United States has already lost its superpower status. It is being feared that America’s economy that is in extreme dire straits, would impinge on its superpower status. Besides, its leadership in the field of science and technology would be prodigiously hampered due to the paucity of funds. It is surmised that the China and Japan will outpace United States in the scientific research. There is also a very potent apprehension that since United States would need more credits from Japan and China; these countries could also influence America’s foreign policy and her conduct of external affairs.
The European Union, a conglomeration of 27 countries is emerging as a strong economic contender or rival of the United States. EU’s common currency Euro is 1.5 times stronger than the US dollar. It means one has to pay 1.5 dollar to buy one Euro. EU is world’s single largest market with a population of 500 million individuals.
United States war bill will astronomically soar if it decides to expand its war on terrorism to Yemen and those pockets where the terrorists are resettling. A military action against Iran preceded by clamping of sanctions and embargoes on that country would not be a one sided affair. Like the Somali pirates a similar kind f blockade can be mounted by Iran in the Strait of Harmus which might lead a calamitous conflagration in the area between the United States and west on one side and Iran on the other. Bu the paramount question is that in the face of a crumbling economy and much dependence on foreign loans, would this be a rational or the prudent course to adopt? Will not the armed standoff, if not the actual engagement, spell further disaster for the American economy?
Should United States still push for opening more armed conflicts around the world, despite the stalemated war situation in Iraq and Afghanistan and the domestic economic decline with closure of such giant enterprises as Chrysler and General Motors, complete mess in real estate and closure of elephantine financial institutions,? We can chase the Al-Qaida all around the globe with our forces and huge military potential but is there is an iron clad guarantee that this pursuit would end at some point of time with absolute success.
Besides these economic disasters, it is being conjured that with the unfunded liabilities and payments to the million of retiring baby boomers in the coming times, not only would create chaos in social security, Medicare and Medicaid but also push up the American national debt to a horrifying level of 50 trillion.
So what is the prudent and safe way-out of this treacherous marshy situation in which we can further sink instead of jumping out of it with a victorious banner in our hand? The enemy is not stationed or concentrated at one place. If it is defeated in one part of the world, it slips to another part, thus forcing the United States to move to the new places and sactuaries as well.
A better, pragmatic or discreet strategy could be to assign the task of hunting, combating, and eliminating the terrorists to the countries from where they operate or are based. This strategy is paying its dividends in Pakistan where Pakistan’s army has earned the singular distinction of subduing the radical militants and terrorists in various parts where they were well entrenched since the defeat of the Soviet Union in 1989. The bulk of the miscreants and their local abettors have been exterminated or forced to surrender or flee.
The incumbent U.S. administration was passed on the cataclysmic war hysteria by former Bush administration manned by extreme right radical wings commonly known as neo-cons. Imbued by a misplaced fervor to conquer the anti Christ nations, in this case the Muslims, they launched their mighty military forays against Iraq which was a blatant transgression of the international norms governing the interstate relations. Saddam was a person no less than a devil. He was sinister both for the region and for his own suppressed people. But merely to remove him at a huge cost was such a grievous blunder whose baneful and ruinous repercussions continue to this day.
The United States should have withdrawn once the tyrant was fallen. The tyrant however never gave an impression that he was an adversary of the United States. If United States mounted that gubernatorial military adventure for the safety of Israel then it should be understood that by saving Israel, America ruined itself economically, militarily and even morally.
I would like the United States to make the world and United States safe havens by killing all the terrorists and the anti American elements. But this cannot be achieved by fighting unnecessary and self destructive wars on foreign soils. What United States have not achieved at the cost of making it economically broke, could have been achieved by giving a fraction of the war funds to the countries where the terrorist elements were hiding.
A mighty and majestic country, a well deserved superpower after the defeat of communism is beset by rampant and escalating unemployment, huge debt burden, and trade imbalances. There is in the making a doom’s day scenario exacerbating with every passing moment. The streets of United States look run down; the roads cannot be repaved for want of funds, and are instead resurfaced with ugly uneven patches. The bridges are old, the signboards are obsolete. The loans are scare and not easily available; the air travelling is turning into a nightmare. The educational institutions don’t get the adequate funds; the hospitals are overcrowded and handicapped because of insufficient budget allocations and so on.
The social-civic sector that was an exemplary hallmark of American society is now in the throes of decline and decay. Name one sector that is financially sound and stable in the face of the ongoing economic meltdown. A realistic reevaluation of the prevailing frightening situation that is devouring the wealth of this great country is called for. Concurrently the war on terror can be won with much less hassle and loss and at much less cost and without committing the American troops to fight in foreign uncharted and inhospitable terrains. Moreover, they look like occupation forces.