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Web Letter

Thank you for the sobering article. I agree that Nixon and Kissinger opened China to the wider world, and even though I'm conservative, I believe that those across the aisle have had impact as well.

One thing that I do not understand is why the US government keeps its "books" as it does. All spending, regardless of short-term expenses or long-term investments, are considered the same way, and impact the annual budget equally.

This is not how a household or a corporation works. After all, most people buy homes that are about three times their annual income. By government accounting methods, the "family GDP/debt ratio" would be about 400 percent of "Gross Family Product" in the year a house was bought. The US budget deficit, by comparison, is currently about 10 percent of GDP, a historically high number, but nowhere near 400 percent.

The asset base of the US government has to be in the tens, if not hundreds of trillions of dollars. Our national debt, not counting unfunded liabilities, is just under $12 trillion. Not chump change, but a very small "leverage" against the assets.

Why do we not account for current expenses and long-term investments as a household or a corporation does, and "capitalize" the long-term debt--much like a mortgage?

To me, this would be far more honest accounting, and would effectively straighten out the financial mess in a hurry. It would be pretty obvious whether the income of the US would support both the debt load (mortgage) and the current expenses--and to me, would be easier to manage and plan over the long term.

At the same time--we as a nation are way overdue for a "step back" and reconsider what exactly is the role of each level of government; agree to restrict each level of government to its assigned role; and decide how we're going to pay for it. Too many people get "their government" for nothing. This isn't an appropriate way to run a republic. Everyone should share the burden, no matter how small a percentage it is.

What we do today is run the governments at all levels in a totally ad hoc manner. This is totally counterproductive, and ends up having emotion rule the day.

Shape up, America!

Michael W. Langlinais

Waveland, MS

Jul 30 2009 - 10:07pm

Web Letter

Thanks for the analysis, Mr. Scheer. One point, though. I sense you are trying to credit the Obama administration for going multi-partner with China. Credit for kicking that off must go to Nixon and Kissinger. In addition to isolating the Soviets, they gave China a chance to think about participating in a wider world. Better to compete in the marketplace than kill each other.

On the other hand, as the first letter here says, they have become the economic monster they are by selling cheap goods into very mature Western markets. When do we reach saturation? They have been able to out-price the West because of extremely low-wage labor, minimal environmental controls, no social safety net. A libertarian free-trader's dream. Meanwhile our real wages erode, I suppose , until equilibrium is reached with China, therefore making the USA too poor to buy even Chinese goods. I suppose that ought to start potectionism and a shooting war?

mike flynn

New York, NY

Jul 30 2009 - 12:04pm

Web Letter

The Chinese are out of their minds if they base their economy on trade with collapsing Western markets. They need to concentrate on the development of their own market and consumer base. Their economy needs to service the internal Chinese market and not disappearing Western markets. They can control their own economy, but not the world's economy. Nobody can control the world! They need to pay their workers a high enough wages to produce disposable income for consumer spending. They need good wages, disposable income and a social safety net if they want to maintain harmony within their own country.

Free Trade has trashed Western markets, and their only hope of keeping their American investments safe is if the US doesn't trade with China but redevelops its own industries, jobs and market. They are going to lose every penny, if the present stupidity continues in Western countries!

Pervis James Casey

Riverside, CA

Jul 29 2009 - 11:24am