Economic growth in America has been sluggish since the end of the recession in 2009. There are myriad reasons why this is happening. Many of them are internal to our country, such as government uncertainty related to health care and bank regulation.
But internal problems are being compounded by warlike conditions that are hindering our economic recovery. In my opinion, the U.S. economy is being assaulted in four different “wars.”
First, is the actual war, our military involvement in the Middle East. This fighting requires an expenditure of resources that could be used to invest in America’s future by building roads, bridges and other infrastructure that would enhance our long-run competitiveness in the global economy.
The second front is the cyber war. Every day somebody from Russia, Eastern Europe or China steals credit card information, health records, business secrets and our newest technology. Our banks and businesses have to spend massive amounts of time and money to defend against these assaults.
The third front is the currency war. In the global currency arena, whoever has the cheapest currency has the best advantage to sell products around the world. Japan and China are experts in this tactic. They know that if they keep their currency and products cheap, Americans will prefer to buy their products over more expensive products made here. Europe is now doing the same thing. They talk incessantly of the need for printing more money. Talk like this makes the Euro cheaper. It gives Germany and others an even greater advantage when they sell cars and other products in our country. As these countries succeed in the currency war, it will be harder for American workers to compete.
The fourth front is in the energy market. Can you remember back in the golden days when filling stations would have a “gas war”? One station would arbitrarily cut the price of gasoline to get all of the sales that day. For historical reference, this would have been back in the days when Herman’s Hermits and the Dave Clark Five were the hottest new bands. Well, Saudi Arabia and OPEC have declared a gasoline war on America. They are determined to produce enough oil to make the price go way low. If they can get the price low enough, they think they can greatly reduce American oil and gas production (meaning massive layoffs in the U.S. energy sector).
So, when you look at the entire global perspective, the U.S. economy is doing pretty well. It continues its modest growth while simultaneously fighting global wars on four different fronts, but the United States is still the strongest economy on earth.
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