Last few weeks, the news of U.S shutdown has been making rounds on social, electronic and all media platforms. If we browse through you tube, there are stories by "am TV" suggesting how this is a pre planned conspiracy of the Obama government for a political gain. Some are suggesting that it has been done to create a threat to nations like China. When we read Chomsky and think of his views, we can sense how he is bashing Obama and his administration. Chomsky through his writings is also hinting of how the U.S domestic political paradigm is now not only of Democrats and Republics but it comprises of a multitude of fractions within them. There is also a movement of these fractions within Democrats, Republics towards the Centre. Apparently, these fractional groups moving towards the centre played a key role in solving the political deadlock that resulted in a loss of almost 22 billion US$ (an approximate number) through a shutdown. The tensed atmosphere has got some fresh air and relief till February 2014 as the debt ceiling from the treasury has been raised. This kind of shutdown is not new for U.S economy as earlier also there have been such shutdowns.
However, I will not deal with the above mentioned issues here. I will approach the event of this U.S shutdown in another way. For a moment, if we believe that U.S is actually running out of money to pay for its debt without considering any of the conspiracy theories, political bargaining situations: then what does it mean to us. It means that investors will lose confidence in U.S treasury bills and they will pull out money. It will mean, China and India which holds U.S treasury bills will be hit hard if U.S defaults in payments. But the larger question is why U.S is not generating enough money within the real economy and why it is depending on the treasury. The answer is quite simple. If one studies the pattern of U.S economy post 1990s, it is well evident, that it has generated over consumptive behaviour within the people of the country. Therefore, it has pushed people to get credit card and buy consumer products, get loans and buy houses, promoted people in buying assets which are toxic. So if the value of these toxic assets are of worth "2x", within the economy there is not even a value creation of goods and services worth even "x". Investments have not been drawn to sectors which can create a good, service for the economy. This can atleast generate real income for the government and the people. Pushing people to buy something through credit cards, loans doesnot create income for them. However, dangerously it can create an illusion for the people as their possession of assets, material can go up without a rise in any real income for the people and the government. This push for illusive consumption can however make one segment of people dealing with the business of credit cards, loans, toxic assets, insurance services very happy. They can lobby hard to maintain this. But at the cost of what - No real income for the economy, people, government?. It is like a house whose monthly earning is only - "y" and it is continuously chasing an aspiration of consuming assets worth of "2y" with the false promise that there will always be a support of virtual money to chase aspirations worth of "2y". This qualitative change has happened in the U.S. economy and pressure points are now being shown again and again: sometimes through financial crisis and sometimes these shutdowns. Something has gone terribly wrong with the U.S. economy and the worst part is that in a globalized world, any such pressure is going to hit other economies too. It is important for U.S to act a little more responsibly and stabilize the qualitative changes that has happened within their economy. Such stabilization doesnot mean that a war is sponsored in some other country of the world that generates some income through sale of weapons at the cost of human losses in different parts of the world. It also doesnot mean an increase in defense expenditure at this juncture. U.S also has to detach itself to not use "oil" as a weapon to get strength in dollar and get back confidence in their macroeconomy and treasury bills. These tactics we all have seen in the past. But in those times, the world was not showing so many pressure points which in some ways are connected to a qualitative change in the U.S. economy.
Today, we are facing other pressure points of domestic, international, political, ethnic conflicts, international terrorism, financial crisis and many more related to the science, laws of nature. In an integrated world, these pressure points spread quickly and effect people. Therefore, its time to detach ourself in little little ways. Every country has to consolidate their domestic set up now independently: this doesnot mean that trade relations will not continue: they have to exist and will continue. Need of the hour is to build up domestic national strengths of economy by bringing a qualitative change in the mindset of the people of every economy. Community, local economy bondages through strong backward and forward linkages to local markets have to be strengthened. Integration between countries through toxic assets, fiscal routes and debt structures have to be reduced. Countries have to generate their own real income through promoting the basic core sectors like agriculture, manufacturing but by protecting environment. These views have to be promoted through forming movements by joining like minded people across nations. This is the new form of globalization that we need to stabilize the uncertainty that has arisen from qualitative changes that has happened in macroeconomies of different countries of the world in the last 20 years. Time for now is to attach and detach to promote development and then growth. Therefore actions have to be initiated to stop any expansion of profit which creates a subjugation of one race, economy, culture, livelihood, economy over the other. Thus the time has come to stabilize profits across all segments of macroeconomies of the world. Time has come to stabilize all uncertainties by detaching from profits and attaching more values to the qualitative attributes of an economy and human life. As they say - attachment and detachment both are necessary for personal development and it holds for a society, nation, economy and the world too!
However, I will not deal with the above mentioned issues here. I will approach the event of this U.S shutdown in another way. For a moment, if we believe that U.S is actually running out of money to pay for its debt without considering any of the conspiracy theories, political bargaining situations: then what does it mean to us. It means that investors will lose confidence in U.S treasury bills and they will pull out money. It will mean, China and India which holds U.S treasury bills will be hit hard if U.S defaults in payments. But the larger question is why U.S is not generating enough money within the real economy and why it is depending on the treasury. The answer is quite simple. If one studies the pattern of U.S economy post 1990s, it is well evident, that it has generated over consumptive behaviour within the people of the country. Therefore, it has pushed people to get credit card and buy consumer products, get loans and buy houses, promoted people in buying assets which are toxic. So if the value of these toxic assets are of worth "2x", within the economy there is not even a value creation of goods and services worth even "x". Investments have not been drawn to sectors which can create a good, service for the economy. This can atleast generate real income for the government and the people. Pushing people to buy something through credit cards, loans doesnot create income for them. However, dangerously it can create an illusion for the people as their possession of assets, material can go up without a rise in any real income for the people and the government. This push for illusive consumption can however make one segment of people dealing with the business of credit cards, loans, toxic assets, insurance services very happy. They can lobby hard to maintain this. But at the cost of what - No real income for the economy, people, government?. It is like a house whose monthly earning is only - "y" and it is continuously chasing an aspiration of consuming assets worth of "2y" with the false promise that there will always be a support of virtual money to chase aspirations worth of "2y". This qualitative change has happened in the U.S. economy and pressure points are now being shown again and again: sometimes through financial crisis and sometimes these shutdowns. Something has gone terribly wrong with the U.S. economy and the worst part is that in a globalized world, any such pressure is going to hit other economies too. It is important for U.S to act a little more responsibly and stabilize the qualitative changes that has happened within their economy. Such stabilization doesnot mean that a war is sponsored in some other country of the world that generates some income through sale of weapons at the cost of human losses in different parts of the world. It also doesnot mean an increase in defense expenditure at this juncture. U.S also has to detach itself to not use "oil" as a weapon to get strength in dollar and get back confidence in their macroeconomy and treasury bills. These tactics we all have seen in the past. But in those times, the world was not showing so many pressure points which in some ways are connected to a qualitative change in the U.S. economy.
Today, we are facing other pressure points of domestic, international, political, ethnic conflicts, international terrorism, financial crisis and many more related to the science, laws of nature. In an integrated world, these pressure points spread quickly and effect people. Therefore, its time to detach ourself in little little ways. Every country has to consolidate their domestic set up now independently: this doesnot mean that trade relations will not continue: they have to exist and will continue. Need of the hour is to build up domestic national strengths of economy by bringing a qualitative change in the mindset of the people of every economy. Community, local economy bondages through strong backward and forward linkages to local markets have to be strengthened. Integration between countries through toxic assets, fiscal routes and debt structures have to be reduced. Countries have to generate their own real income through promoting the basic core sectors like agriculture, manufacturing but by protecting environment. These views have to be promoted through forming movements by joining like minded people across nations. This is the new form of globalization that we need to stabilize the uncertainty that has arisen from qualitative changes that has happened in macroeconomies of different countries of the world in the last 20 years. Time for now is to attach and detach to promote development and then growth. Therefore actions have to be initiated to stop any expansion of profit which creates a subjugation of one race, economy, culture, livelihood, economy over the other. Thus the time has come to stabilize profits across all segments of macroeconomies of the world. Time has come to stabilize all uncertainties by detaching from profits and attaching more values to the qualitative attributes of an economy and human life. As they say - attachment and detachment both are necessary for personal development and it holds for a society, nation, economy and the world too!
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