Nine Ideas From Around the World to Fix US Economy
This is an interesting and topical item by Peter Coy for Bloomberg. Here is the introduction:
June 9 (Bloomberg) -- Democrats and Republicans are dug in like soldiers at Verdun over what to do about the sputtering U.S. economy. Exhausted by the political stalemate, they've been reduced to magical thinking, hoping that things will eventually get better by themselves.
But time isn't on America's side. The country is suffering its highest average duration of unemployment since at least 1948.
"The longer this goes on, the greater the danger that the cyclical downturn becomes structural," says Karen Ward, senior global economist at HSBC Holdings Plc in London. "People and things that lie idle start to lose their productive value. Then you're into all sorts of troubles."
It may finally be time for Americans to consider ideas from a place that they don't usually look to for inspiration: the rest of the planet. The U.S.'s economic predicament does present some unique dilemmas. The Obama Administration has already pushed hard on the levers countries usually use to get out of a slump, to little discernible effect. Short-term interest rates are near zero and fiscal stimulus is aggressive, judging from a budget deficit of about 10 percent of gross domestic product.
"We're basically in uncharted territory," says David Rosenberg, chief economist at Gluskin Sheff & Associates, a Toronto-based wealth-management firm.
Maybe so. But there are guideposts that can help point the way out. The U.S., after all, isn't the first country to wrestle with how to restart growth despite budget deficits that constrain big-spending solutions. The challenge is how to apply lessons from other countries to shore up American weaknesses, without sacrificing the strengths that make the U.S., for all its troubles, the world's biggest economy.
To prod the conversation forward, Bloomberg Businessweek scanned the world and found innovative economic ideas in countries as diverse as Germany, Brazil, Singapore and Thailand that are applicable to America's mess. The focus was on short- term solutions, but since there aren't a whole lot of miracle fixes to be had, we also considered some longer-term reforms that create a better environment for years of sustainable growth.
There's no guarantee that all of these ideas would work in an American context. But it's clear that some fresh, non- ideological thinking is needed.
"People in the U.S. confuse big government and small government as the only two models -- what we need is smart government," says Dow Chemical Co. Chief Executive Officer Andrew N. Liveris, a Greek-Australian-American and author of the book "Make It in America: The Case for Re-Inventing the Economy."
By smarter government, he means government that puts business objectives ahead of politics. "Countries are competing like companies more and more," says Liveris. "In the U.S., we haven't caught up."
Here are nine ideas from the rest of the world to get America back in the race.
David Fuller's view Interesting and you can never have too many ideas to mull over so the discussion needs to continue. I imagine it will.
Sometimes things need to get worse before they can get better and I think America would benefit from a spirit of national unity, achieved by peaceful means.
I agree with Congressman and presidential candidate Ron Paul's policies of closing all USA military bases in foreign countries, and a flat 10 percent income tax with no deductions.
These are not mentioned in the article above but two others are which I also favour: a national consumption (VAT) tax and a meaningful gasoline tax to reduce the deficit.