July 1 2012 – Aftershock Economy Perspectives
Chile and New Zealand economic turnarounds in 1980s and 1990s respectively can provide hope US can avoid a most severe downturn.
Robert Weidemer is his 2 Aftershock books believes that it is very likely US is beyond point of no return. This is due to its enormous debt which keeps increasing and lack of political will to reverse our expanding debt. Recall the exercise Weidemer goes through describing process US would need to embark on to payback our debt (now 15.7 trillion). If we chose 30 years (NOT an aggressive time frame), US would need to nearly double taxes to maintain current spending levels in order to pay back our debt. The math looks good. However experience tells us that increasing taxes decreases Treasury revenues so I argue this is a non starter.
Why assess Chile and New Zealand? Because both were on verge of bankruptcy . Both turned around their economies via free market principles to point where they have for past 2 decades been world leaders in yearly economic increases. Chile privatized their social security and eliminated much debt. That and other free market reforms resulted in a country that now has ZERO debt. New Zealand privatized many largely gov controlled industries to lead its way to prosperity. In 1990 its telecom industry was a shambles with delays as long as half hour for access. Privatized it now leads the world in the telecom industry.
The above was discussed in an exceptional June 25 Americans For Prosperity (AFP) seminar by Steve Lonegan (who was my choice for Gov in the 2009 NJ Republican primary).
Steve stressed it is very possible for the US to regain its prior economic momentum, citing the Chile and New Zealand turnarounds as models. The US per Steve needs to reinstitute free market principles again. This will unleash its prior world renowned and envied entrepreneurial successes.
Given his optimism I referred him to Robert Weidemer’s predictions that US is almost assuredly beyond pt of no return. Steve again reasserted his optimism that we can recover from our economic quagmire.
Details how to do so are listed in other posts on my site with title of Aftershock.
In sum though it was very refreshing to hear of encouraging possibilities for the US. Steve’s seminar was not a cheer leading exercise. Rather he went into great details how Chile and New Zealand benefited from their new commitment to free markets. this then i feel motivated all who attended (28) as we are the grass roots of the AFP. I will have more about this in future posts.