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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (78758)	5/20/2008 6:08:24 PM
From: RealMuLan	Respond to of 116555

No More Mr. NICE Nation dailyreckoning.com And now, Will Hutton writes in The Observer that the United States will stay ahead of China in the 21st century, because it has more knowledge and brainpower...more universities...and a commitment to new technologies. Maybe Mr. Hutton is right. We had the same idea ourselves, when we were about 14 years old. We recall thinking that America was unbeatable...because she had created an almost perfect meritocracy, in which the brightest people – among whom we immodestly counted ourselves (remember, we were just 14 years old) – would always rise to top positions in government and business. These people could go to public schools and state universities, learn all the latest ideas and useful knowledge, and then apply what they had learned in their careers. The system was self-perfecting all the time. Later, we realized that the brightest people are capable of making the greatest errors and suffering the biggest delusions...and that even the best systems are inevitably gummed up by self-seeking parasites and corrupted by time. We are, as Aristotle put it, a “deathward going tribe.” All our institutions age...decay...and die. Universities are just are part of the lifecycle...from birth to decadence. Universities follow money and power, not the other way around. People get rich; then they build universities to celebrate and eliminate their wealth. People who could be doing good work on assembly lines or road crews are shunted off to ivy-covered campuses, where they undertake discussions of the role of gender in Egyptian history...or a metaphysical interpretation of the cinematic experience in, say, Dude, Where’s My Car? Universities impoverish society; the scholars inevitably reduce the net knowledge of the population with foolish ideas and preposterous plans. After a few generations, the professors have introduced not only gender studies and film interpretation, but Social Security, ethanol, Medicaid, central banking, option pricing models, wars on terror, tax rebates, subprime mortgages, progressive taxation, direct election of senators – and all the other bugaboos and balderdash of modern societies. Naturally, all these humbugs cost a lot of money. Yesterday, USA Today gave us an accounting. In the last year alone, it figured, the real deficit of the federal government increased $2.5 trillion. USAT did what we have done many times before – it looked at government finances as if it were a business. Sharp pencils in hand, it found that the federal government has net unfunded obligations of $57.3 trillion – or about half a million dollars per household. Add in state and local budget shortfalls, and you get to $61.7 trillion. This year alone, Medicare added $1.2 trillion to federal obligations. Social Security made the situation worse by $900 billion...and veterans’ benefits tacked on another $34 billion. The last time we looked, the average American household had net assets of only about $70,000. How is it going to pay more than $500,000 to support government’s promises? In effect, the typical family is broke, with liabilities far greater than its assets. We only bring this up to explain how it is possible for such a great nation – with so many great universities – to fall into decline. And now, looking ahead, Bloomberg says the “sub-par growth is the New Normal in the US.” Naturally. When you reach a certain maturity, with so many burdens on your back, you slow down.