How to solve our problems (updated)

1.       We consume more than we produce. Cut down on consumption, applied to both citizens and government. Our false prosperity depends too much on consumer spending. It has created all imbalances including Federal deficit and trade deficit.

Raising the interest rate would reduce consumer loans and investment loans at the expense of the stock market, building industry and big-ticket sales. We have to bit the bullet before it is too late.

2.       We borrow more than we save. US saves about 2% while China saves about 15%. Save more and do not max out our credit cards. We cannot postpone our debts to next generations. Once-the-richest country borrows from the once-the-poorest country to support our spending.

3.       We are not as competitive as we were in the 50s and 60s. Do not give out money generously to foreign countries. When the government spends more in paying dividends of our gigantic national debts, we have less money to invest in infrastructure, education... that would boost our competitive edge.

4.       The expenses of endless wars should go to investment for our future such as infrastructure. Why we protect Japan, NATO countries and some countries that are wealthy?

We no longer depend on oil from Middle East, so we do not need to use military force to protect our oil route.

Does Vietnam today threaten us? Why we have to force the world to follow our way of life?

We need to concentrate on cyber security that could collapse our financial systems and expose our secrets / technologies.

5.       The world is more competitive (esp. China) and it looks like it is getting worse. Do better negotiation with our trade partners. Trade war is not the solution but taking out trade barriers to our products is. We have to understand why we are not competitive.

6.       We need to give up some sectors such as those that are labor- intensive and/or environmentally harmful - evaluate benefits and losses.

7.       We need to motivate our able welfare recipients to work to take up the jobs currently performed by illegal aliens. Our generous welfare encourage folks not to work. If they work, they would lose all the subsidies. They are lazy but not stupid.

8.       We need MORE (not less) H-1B visas to attract top scientists, engineers... to remain in our competitive edge. However, only let immediate children come. Many of their parents come here and collect welfare to further burden our entitlement system.

9.       We need to balance the budgets, cut down entitlements, fund research, fund infrastructure (including security to protect our IP)...

10.   We need to be doers instead of talkers. While we talked about the high speed rail (HSR) in California (that may not be useful here), China has over 60% of the global HSR. To start, get the two parties to sleep in the same bed. They disagree with each other if the idea is not from their own party.

11.   Our children cannot compete with Chinese, Japanese and Koreans. They spend too much time in enjoying life. If you believe they will achieve the same in life, you believe in fairy tales. Education starts at home. When we have too many single parent families and teenage mothers, do we have a future? We need to protect our youths from shootings and drugs.

12.   The military might should be supported by a strong economy but not in our case. If we were a company, we have been bankrupted with debts and entitlements. We have to put our priority and effort in improving our economy and be competitive.

Realistically, most proposals above cannot be executed by politicians. They are more long- term solutions that the politicians are not interested in. The voters want to have the maximum benefits with least taxes. We are a nation of free loaders.

We are still leading the world in many sectors. We still have top-notch universities and profitable multi-national corporations. Do not live in denial that we are not declining. Check out any top-notch college or any big high-tech corporation, and you can find many foreign faces compared to 30 years ago. Most are new immigrants and their children.

We may be following the footsteps of the great British Empire. Our technology revolution since WW2 may collapse like the British Industrial Revolution. Our reserve currency could follow the British pound in losing the status. Hopefully we will make corrections to reverse the trend. If the trend does not reverse, hopefully it is not in my life time.

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The above is from my book "Can China Say No?". Click here for more info in Amazon.com.