The American Model

[Stepbrow]

This is not a thread about comparing China and the US, so don't go there.

 

The purpose of this thread is to look at the good and bad of the American Model, and see where it can be improved(we all know that it is not perfect).

 

The idea came from some musings that I had about all of the fear, and gloom and doom resulting from the current recession. I tend to be an optimist, but I also realize we have some major problems in our system.

 

First, Who has control of our political system? Theoretically, the citizens of the US are the sovereign. The government belongs to us. Yet, often our government often acts contrary to our interests. Why is this?

 

Second, Economics and Taxation. Because we are a capitalistic system, we will always have a business cycle. This cycle is a good thing because it brings about improvement and increased efficiency in the system. How we improve our management of the cycle?

 

From an individual point of view, if we as individual consumers changed our way of thinking to that of our Asian cousins by saving more to get us through the down times, we would not have so much fear when we have a down cycle. Currently many (most?) people live beyond their means because credit is so available. Most live pay check to pay check which means they have no cushion when things go bad.

 

From an economic system point of view, considering my limited understanding of economics, there are two big concerns. First, I question the deregulation that took place in the banking industry. In retrospect those changes didn't appear to have been in the best interest of the "people" but greatly benefited the banks. A balance must be struck so that banks can have the freedom transact business, but also so that individuals will be protected from predatory lending. Second, there are always people who look for ways to game the system. This is what led to the derivatives and other toxic assets. Would appropriate regulations have prevented this?

 

Tax and Spend: Our government has been living off of credit too long. Why is it that China owns $800.5 Billion in US debt, and Japan has $724.5 Billion (as of June 09). Can our system change so that we (individuals and government ) are not living hand to mouth. Obviously, what I am getting at is that our government needs to spend less ( then it will need to tax less), but how do we do this?

 

Why can't we come up we a fair and relatively uncomplicated taxation system? Would getting the special interests out help?

 

Third, Special Interests. Much of what drives government decisions is the interests of certain groups. How do we curb the power, of these groups so that decisions are made that benefit all of us? You see special interest power throughout government from election of officials, to passage of legislation.

 

I know there are lots of smart guys on this forum, so have at it. List problems of concern that you have, and also solutions that you propose.

 

Oh, by the way just because you disagree with someone else's idea doesn't mean that it is stupid, or that they are an idiot.

[LeeFisher3]

Unfortunately history has shown that there is absolutely nothing that can't be made worse by government involvement. Although there have been limited exceptions to the rule in the past 50 years, but I doubt those were on purpose or by design.