Bill Gross of PIMCO has launched another scathing assault on the U.S. government and its leaders policy decisions suggesting they are choosing “Easy Street” over “Buckle Down Road.”
His comments suggest the U.S. is making a series of decisions turning the country away from competition, rather than choosing to duke it out with the emerging world.
The second route to the level playing field involves political and financial chicanery: trade and immigration barriers, currency devaluation and military domination of foreign oil-producing nations. It is by far the less preferable route, but unfortunately the one that is easier and, therefore, most politically feasible.
And the greatest example of this sort of decision-making can be found in the political wrangling around the deficit commission.
The President’s debt commission with its insistence on low personal and corporate income tax rates and a mere 15 cent increase in the gasoline tax was one example. The Republicans’ reluctance to advance detailed ideas for budget balancing is another. And the Democrats’ two-year focus on the biggest entitlement program since Social Security – healthcare – as opposed to fundamental reforms to counter our lack of global competitiveness – is perhaps the most grievous example of lost opportunity.
Gross says the U.S. should be choosing policies that make the country more competitive and less like the Billy Joel post-steel production dystopia, Allentown.
Investments in infrastructure and 21st century education and research, as opposed to 20th century education are mandatory, as is a withdrawal from resource-draining foreign wars. It will be a tough way back, but it can be done with sacrifice and appropriate public policies that encourage innovation, education and national reconstruction, as opposed to Wall Street finance and Main Street consumption.
But the U.S. is choosing not to compete and rather, use every easy way out at our disposal, including QE2.
And yes, policymakers at the Fed write trillions of dollars’ worth of checks under the guise of quantitative easing, a policy which takes Charles Ponzi one step further by purchasing the government’s own paper in a last gasp effort to support asset prices.
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