Although I'm intrigued by your response, I don't really see how all the pieces would fit together here. Maybe you could clarify a few points for me. Also, thank you very much for taking the time to elucidate your views.
"Basically, we only have a Current Accounts deficit because everyone invests in (purchases with foreign currency) United States Dollars, so we buy goods with that foreign currency. Once the rest of the world decides to stop investing in America, the CA deficit will go away."
That's one of the things that worries me. Let's say other countries decide that dollars are a bad bet, and they stop investing. What happens to the dollar--rampant inflation? Where do we get the extra $2 billion dollars a day?
"The National Debt - Scary. The public sector is incapable of making the kind of investments that would make borrowing money worth it. We should stop entirely, and start paying it off."
Let's say we do stop entirely and start paying it off (we were, briefly) -- where do we get the money from?
"The only expense that the public sector needs to invest in is security, lets divest ourselves of social programs."
I think that would hurt far more than it would help. However, I suppose it would be a quick and easy way to raise income inequality, and push the US closer to third world status.
"Interest Rates - are under the direct control of the fed, and are not really an indicator of anything such as they are."
Maybe they are now, but that doesn't mean that they always will be. See the first point about "Once the rest of the world decides to stop investing in America".
"Job Growth - Do your part, start a resteraunt. Job growth is driven by small business, not government."
lol. I would if I could. Not that restaurants tend to be terribly successful. No, another failed restaurant just means that someone else managed to pay people for a while at the expense of a bank loan gone bad. Sort of a microcosm of a lot of issues that we face.
"China would see huge gains from floating their currency, because they wouldn't have to spend to maintain the peg. We really don't care."
Well maybe you don't, but I do. Again, this goes back to the first point. If China floats their currency, they won't have to buy dollars from us, and fund our debt. Maybe other people will buy the yuan instead.
"Government Expenditures vs. Income - Again, Government is incapable of investing in value. They need to back off to the things that have a need for them, like defense."
What makes you think that the government makes good investments in defense? That seems like one of the most corrupt and overvalued sectors we have, precisely because of government involvement. Their accounting was so bad that they literally couldn't account for $3.4 trillion dollars over a two year period of reviewing the books. Where did that money go? We have no idea.
"Taxes and Tax Reform - Good idea. A consumption based tax would kill the wasteful tax avoidance industry and encourage investment instead of luxury consumption. This is thinking on the right path."
I think so. Although I would like to be sure that whatever consumption tax is chosen is progressive enough to not tax the lower and middle classes more than they already are being taxed now, the FairTax is at least nominally a progressive one.
"Social Security - The problem is that the Social Security Trust Fund is invested in treasury bonds, it's like investing in your checking account. This needs to be invested elsewhere, either in stocks or in foreign bonds."
Actually it's more like an IOU to the government in the form of a regressive tax--but that's just because the Social Security 'surplus' goes into the general account. Investing it elsewhere may or may not help depending on the investment, but it'll ultimately just create another bubble--we'd have a big problem when the baby boomers cash out.
"Defense Spending - This is governments job, we should argue for transparency, but I am much more concerned about the more wastefull things the government does."
I guess I covered this one already--defense spending can get pretty wasteful. It accounts for far, far more money and pork than the "non-defense, non-discretionary spending" that was recently cut (not even adjusting for inflation).
"Gas is expensive enough that I am considering a Hybrid vehical. That is how the market handles things. This is not scary, it is just supply and demand. I am scared of the government trying to fix it though."
I don't see why--often, markets need encouragement to do the right thing. The very reason that CAFE standards aren't helping our gas consumption as much as they used to are because of the exemption for 'light trucks' (then jeeps, now also SUVs) that allowed car companies to be both more profitable and less fuel efficient. Instead of the government 'fixing' things, you end up with corporations lobbying for ways the government can 'break' things in their favor. Free market? The market doesn't always magically look out for your best interests.
"Health Care - The Government has really fucked us here by building a third party payer system in America. This needs to be dismantled. Perhaps people should keep health savings accounts instead of insurance?"
The whole point of insurance is to be there for you when you can't afford it. I might come out ahead on a health savings account; someone else might come out woefully behind. It's no guarantee of security. No, the problem here is the cost itself--especially for the uninsured--which has been pushed up a great deal by the insurance industry.
"Stupid bias against Nuclear energy keeps horrible fossil fuels when Nuclear power is cleaner and cheaper."
I think that's true to some extent, although nuclear energy is more expensive in the long run than you'd think--it has large up-front costs, and serious waste-disposal considerations. However, while the plant is running, it is quite cheap. Also that Three Mile Island thing spooked people; I'd hate to see less safe nuclear power plants come online.
"Energy should be the province or energy providers, just like cable infrastructure is the province of cable providers."
Aren't they both essentially local monopolies?
"In short, I am optimistic about the future of the American market. I will feel better if the government takes more of a regulatory and less of an active role. I am not scared by police or military spending, it's why we have a government."
Let's hear it for optimism. I'm fine with the government taking a regulatory role to keep things moving along smoothly, and taking an active role when something really needs fixing. Of course, the goals here are, "don't fix it if it ain't broke", and, don't break it even further than it already is. Which isn't always achieved, but I think that sometimes the government does get a bad rap for the things it does that actually do turn out ok.
As for military spending--I'm all for having a military, but I think we need to seriously look at the spending. All too often it just looks like a blank check, with no accountability. I doubt we'd have to spend much on auditing to recover billions here, and hopefully put procedures in place to keep saving that much and more in the future.
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