UNITED STATES: by Patrick BuchananNews Weekly
America's wrong course
, February 16, 2008
Real wages of working men in the US have not risen in 30 years.With two-thirds of the nation saying the country is on the wrong course, the Democrats and Republicans are offering candidates both of whom played major roles in setting that course. And neither probable nominee has advanced ideas to deal with the crises America faces, nor even shown any great awareness that the country is in crisis.
The first crisis is fiscal, with the Social Security, Medicare and Medicaid costs about to break the bank as the baby-boomers reach early retirement. Add the other entitlement programs, defence and interest on the debt, and this consumes perhaps 90 per cent of the budget.
No one is proposing cuts in any major component of the budget. Indeed, Mrs Hillary Clinton is promising universal health care and John McCain is promising an expansion of the military. Both favour a stimulus package of roughly $150 billion. As our savings rate is about zero, where are we going to borrow the money for all this?
A second crisis is financial. With the economy in danger of seizing up, the Federal Reserve has cut interest rates from 4.25 per cent to 3 per cent in two weeks. This has sent the dollar plunging again. A sinking dollar means surging prices for oil and all those foreign manufactures to which we are now addicted.
As the dollars pour out, nations have started to spend their dollar hoards to buy up this country at the fire-sale prices being offered in the global marketplace.
Then there is the crisis of the American middle class.
As economist Robert Reich writes, the real wages of working men have not risen in 30 years. Families maintained their standard of living three ways. Wives went to work. The men began to work longer hours than in almost any other developed nation. The family's equity in its home was then borrowed to sustain consumption.- from Patrick Buchanan, "Tapped out nation", The American Cause, February 1, 2008.