The US is spending $4 billion a day more than it is taking in, putting the country on an unsustainable fiscal path perpetuated by both Democrats and Republicans, according to David Walker, head of the Comeback America Initiative.
"We're not growing enough and we're not going to grow our way out of this problem," he said in a CNBC interview. "We would have to have double-digit real GDP growth for decades to grow our way out of this hole."
Walker's organization promotes fiscal stability and is warning that the US is trailing many other developed nations in terms of getting its fiscal policies in order. Comeback America is a conservative think tank funded mostly through a grant from the Peter G. Peterson Foundation, named for the founder the Blackstone Group private equity firm.
In fact, according to an index that Comeback America developed, the US is in worse shape from a fiscal standpoint than debt-plagued nations such as Italy or Spain, he said.
With the nation hitting its $14.294 trillion debt ceiling and in need of an extension, Congress is debating the proper mix of tax increases and spending cuts so that the US does not end up like weaker euro zone nations such as Greece, Spain and Portugal that are in danger of debt defaults.
Walker leans more towards the spending-cut side, but also sees inequities in the tax structure that must be corrected to help generate revenue.
"We have to broaden the base—51 percent of Americans don't have any income taxes," he said. "That's not acceptable in a democracy."
The richest Americans are paying just 18 percent income tax rates even while the top marginal rate is supposed to be 35 percent, he said.
Straightening out the imbalances will be a tough choice for politicians and, Walker said, will be an integral part of next year's presidential campaign.
"The 2012 election is going to have to be about what's the proper role for government," he said. "How are we going to solve our financial problems?"
Add in that we police the world to make it safe for international bankers and it is no wonder we are worse off than Europe...
WHY? Because Europe is not suffering from a right-wing Cabal/Media controlling their Government behind the scene as is the case in US resulting in Republican Lunatics and HOAX Liberals like Obama, as a result:
1- European Governments invest much more of their People's money (Taxes) in their people and cities via such things as Universal nationalized health care, Universal education to Ubiquitous (e powered) public transportation etc.
2- European Governments do not waste their people's money on Unnecessary Wars (Iraq War, etc.) or on a Gargantuan Military
Just take the FACT that ALL European countries have Universal nationalized health care, this means while ALL Europeans have health care pretty much for the Taxes that they pay, health care is taking about 9% of their GDP while US has for profit health care, 50Mill+ have NO health care AND health care is taking a DEFICIT BUSTING 18% of the GDP.
I do not believe that cosmopolitanism will be the ultimate trend for the future.
It all started with the so-called free trade agreement between Reagan and Mulroney back in the late 80s. It then spread to Mexico, South America and later on the model was sought to be applied universally beyond the Americas.
It was mostly economics which ushered in this cosmopolitan trend in addition to modern means of communication. Three things happened in the 90s which later on resulted in new challenges facing the trend and applying a brake to the economics benefits envisioned by the pioneers of globalization (North America with the US elephant). The first one was the collapse of the Soviet Union and the later emergence of the European Union. The second one was China reclaiming Hong Kong allowing it to emerge as an economic giant along with other Asian economies. But the most important development was the deregulation of the US financial system in the late 90s which set the stage for the 2008 collapse of the US economy and the rest of most of the world. By any measure the last one was the straw which broke the back of the US by its own doings and its own greed and corruption.
The US will never recover from that defining economic event. As we speak, the limit on borrowing by the government, which I believe is 15 trillion dollars, is being reached. Further, if you are a PhD graduate particularly in certain disciplines, the place for you to be now is China and not the US as it has been the custom since the 40s. You would get all what your eyes would desire to engage in the dreams of your curiosities and interests. No longer is China satisfied with copying intellectual rights of other ‘nations’, but it will soon surpass most of them.
There is only one way for the US to proceed. It will soon have to accept the status of a second rate power. You would also see protectionism rising and I would not be surprised if what is happening in the Arab world now would be happening in US cities, particularly when the ordinary American would discover how cheaply the US was sold by corporate America in the name of globalization, the predecessor of cosmopolitanism.
Pan Arabism failed as it was formulated by the orientalists and not because of the invalidity of Arabism which is a historical and cultural reality, even more vigorous than most national identities of Europe. What we are witnessing now is the reaction from the Arab masses to that model imposed on the region by the colonialist powers of the 19 and early 20th century. Out of this tribulation we would see a re-emergence of Arab nationalism that would be home grown in line with the people’s aspirations....