What's Wrong With America And How To Change It

By Peter Jacobs

In the 1950s, the USA was the most powerful and successful nation on earth. In this book, the author categorically explains what happened and what caused this once great nation’s decline.

What's Wrong With America examines the major problems facing America today, including a fact-filled discussion of the economy and our soaring national debt, a distressing analysis of the unemployment and jobs situation, a revealing look at the specter of potentially looming inflation, a thought-provoking glimpse of our tax code and its effect in exacerbating the distribution of wealth situation, a critical view of our balance of trade problem, and an objective but damning look at military spending. The book further examines America's educational system and its results in the light of the greatest spending in the world today. The author delves into the sometimes-murky world of legislation and regulation. Turning next to a penetrating and sometimes pensive look at our government, in the context of its adherence to the Constitution, What's Wrong With America examines how our government developed and how it operates. America's extensive and costly social programs are reviewed in the light of their effects. Our justice systems, both criminal and civil law, are also addressed. A specific list of recommended changes is provided in the concluding chapter.

WWWA is objective, but interspersed with occasional politically incorrect views. It is hard-hitting, thought-provoking and absorbing.

• Language: English
• Publisher: Peter Jacobs
• Release date: Feb 6, 2014
• ISBN: 9780991479917

Peter Jacobs

Born in Southampton in 1958, Peter Jacobs served in the Royal Air Force for thirty-seven years as an air defence navigator on the F4 Phantom and Tornado F3, after which he completed staff tours at HQ 11 Group, HQ Strike Command, the Ministry of Defence and the RAF College Cranwell. A keen military historian, he has written several books on the RAF, as well as on other subjects of Second World War military history. He lives in Lincoln.

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WHAT'S WRONG WITH AMERICA

AND HOW TO CHANGE IT

By Peter J. Jacobs

Smashwords Edition

Copyright © 2014 Peter Jacobs

This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each recipient. If you're reading this book and did not purchase it, or it was not purchased for your use only, then please return to your favorite ebook retailer and purchase your own copy. Thank you for respecting the hard work of this author.

TABLE OF CONTENTS

PREFACE

CHAPTER I - THE ECONOMY

CHAPTER II - EMPLOYMENT AND JOBS

CHAPTER III - INFLATION

CHAPTER IV - TAXES

CHAPTER V - BALANCE OF TRADE

CHAPTER VI - MILITARY SPENDING

CHAPTER VII - EDUCATION

CHAPTER VIII - LEGISLATION AND REGULATION

CHAPTER IX - GOVERNMENT

CHAPTER X - SOCIAL PROGRAMS

CHAPTER XI - AMERICA'S JUSTICE SYSTEMS

CHAPTER XII - AMERICA'S TURNAROUND POSSIBILITIES

ACKNOWLEDGEMENT

AUTHOR INFORMATION

PREFACE

This book is prompted by the author's deep disappointment in what America has become, and what he believes is the dim future for our country. The above may sound as just simply being a negative viewpoint, but it reflects a great concern that Americans have lost the will to win, to do as well as they possibly can. As a patriotic American citizen, this work is the author's attempt to illustrate the factors that have caused the decline of America, in the admittedly unlikely expectation that America can turn itself around and once again become the shining example of what a free, ambitious and determined people we were not so very long ago.

Many of our readers or prospective readers may think what can be so wrong in a country with unmatched freedoms, where immigrants flock to America because of the opportunities believed to exist here, where one can say and do almost anything without fear of retribution. In the author's view, these beliefs are not borne out by the truth of what's happening in America. Yes, we have liberties not available in other countries, but these are inexorably being eroded by government decree or action without our knowledge, thus even without the awareness of our citizens. Our government, sworn to uphold the laws of the land, frequently, and blatantly, violates that oath. The opportunities which existed years ago have also been threatened and lessened by the quagmire of regulations which act as impediments to the new entrepreneur and smaller businesses.

America was never even close to perfect. While our spirits were high following World War II, after demonstrating our willingness and ability to work together toward a unifying objective, America still faced the problems of racial discrimination, and almost a third of our population lived below what today would be termed the poverty line. However, the positive spirit and raw ambition of Americans led to ensuing economic growth, a substantial improvement in the lives of minority-group people, and progress in the movement toward the Constitution's promise of equal justice for all.

America's decline may well have started as long ago as the 1950s, when we became embroiled in the Korean Conflict, as it was called. This marked the beginning of the role America began to assume as the world's policeman. Encouraged perhaps by the strength we had developed to combat the aggressive and apparently imperialistic attitude of the Soviet Union, the U.S. became fearful of spreading Communist influence. The intense anxiety that the Cold War engendered resulted in a rush to build the world's strongest military, accepting its great cost. The 1950s were followed by the 60s, which saw the civil rights movement gain strength, and a sympathetic federal government that created and funded extensive social programs to help the disadvantaged and America's minorities. These programs came at substantial cost. One cost was monetary: the social programs added substantially to the nation's budget. The other cost was in the unrest fostered by the gradual but still-resisted change in the entrenched attitudes toward minorities that prevailed in parts of America. The 1960s also encompassed the Vietnam War, costing over 50,000 American lives and widespread citizen protests and unhappiness with our government.

The 1970s and 80s continued the public cynicism toward politicians, as lobbies and special interest groups grew in power. These decades brought with them disruptive economic changes: economic growth slowed, productivity sagged, inflation and oil prices soared, family income stagnated, and major industries faltered. Some Americans began expressing their growing uncertainty over what should be America's proper role in the world.

The 1990s saw the United States become the world's only superpower. America had recovered from the economic doldrums of the 1980s and possessed the world's most productive economy and most mighty military. It dominated global trade and banking, and its popular culture became influential throughout the world. The U.S. economy grew rapidly due to the sharp decline in interest rates and the somewhat-reduced price of oil, the new computer and communications technologies, and the expansion of international trade, finance and entertainment. However, the end of the Cold War also saw many ethnic, religious and national conflicts.

As the century ended, America's future once again looked bright, even with the foreign conflicts with which we seemed to be obsessed and our government determined to become involved. The terrorist attacks in 2001 against the World Trade Center and the Pentagon, icons of American wealth and power, changed everything. America had only once before, at Pearl Harbor, experienced an attack on its soil. Again, as in 1941, anger, the desire for retribution, and an equal desire to prevent any recurrence of such an attack brought great changes to America's psyche: there followed sweeping legislation, feared by some but welcomed by others, presaging an invasion of the rights and freedoms so long ago guaranteed by our Founding Fathers. A continuing military buildup enabled America to project its power abroad in the name of democracy, with our political leaders intent on creating regime change in nations not democratically governed. Our government budgets zoomed to all-time highs, as the cost of our involvement in foreign conflicts, the most expensive of which America started, drained our resources. Budget deficits, and with them the size of our national debt, increased to previously unseen levels. At the same time, the social programs instituted by prior administrations grew in size, as did the government bureaucracies established to implement and administer those programs.

We come to the present, and find ourselves faced with an overly powerful, over controlling and entrenched government, a willingness to accept the greatest and still rapidly growing national debt in our country's history, a widening gap in the distribution of wealth where our poorer are further removed from the wealthy elite, and the looming specter of runaway inflation. Yet, in the face of these conditions, which should be troubling to all Americans, we remain obsessed with our smartphones, our social media, the trappings of our fashion and entertainment culture, and our diversions of sports. We are apparently also unwilling to exert the effort required to extricate ourselves from dependence on our government's largesse, so do not want to rock the boat of today's acquiescent government. We perhaps feel powerless to effect the changes America so desperately requires. We may have forgotten that Americans faced even more dire problems a long time ago. Then, we took action, and at great risk, created a nation that became the envy of the world.

This book does not attempt to chronicle American history, or to recite many major events that while very important in the development of our country, do little to explain where we are now or how we got here. Rather, it attempts to focus on the aspects of today's America that the author finds wanting, and examines the events and actions that have created our present dismal situation. The author explicitly disdains the political correctness of the touchy subjects that characterizes most discussions of this sort, and interjects his beliefs where appropriate.

The writer's goal is the reemergence of a morally strong America. We define this condition as having many parts: Where the needy are assisted within reason, and in a manner avoiding dependence. Where the tax laws are changed - both simplified and modified - eliminating tax preferences for the wealthy and the hugely profitable corporations. Where the educational system is changed to produce students attaining the world's highest levels of proficiency. Where the Members of Congress agree, or are caused to agree, to renounce career-long tenure. Where the improper Supreme Court decision permitting the unbridled power of corporate and union political contributions is reversed, reinstating the law prior to that decision. Where Congress accepts and discharges its responsibility in making oversight a true function instead of mere words. Where responsible members of our elected government manage the nation's fiscal policies, without undue influence from Wall Street and the companies judged to be too big to fail. Where a coherent foreign policy extricates America from its continuing actions as the world's policemen, and the world's largest provider of aid to countries many of which are not even considered as true allies or even friends. Where our defense policy and budget becomes a framework for defense, as opposed to enabling involvement throughout the world in any conflict that piques the interest of our government. Where that same revised defense policy disbands the military-industrial complex that President Eisenhower warned us about over 50 years ago. And, where Congress acts on the basis of morality, rather than on the preferences of the powerful vested interests, having been unshackled from their dependence to enable reelection.

Accomplishing these extremely difficult, perhaps even impossible goals requires that Americans will become involved, will become educated about the issues facing our nation, and will exercise their rights to vote. We have exhibited a lackadaisical attitude toward voting and as such have largely abdicated our responsibility to control government. Perhaps a law making voting mandatory for all Americans as a condition of receiving passports and benefits from at a minimum federal programs might be useful to consider. Merely voting, however, without the precondition of being educated about the issues and becoming involved will not be sufficient.

These goals also will not be possible to achieve in the absence of rational control of power. That is, the power of big business, the power of the unions and the power of all of the branches of government. This may be a utopian view, but in the absence of control, power has historically become unchecked and detrimental to the common good. The happy medium may be impossible to actually effect, but attention and sincere effort simply must be accorded to this critical issue.

CHAPTER I

THE ECONOMY

The sky is falling. Or is it? The condition of the American economy has perhaps the greatest single effect on how we live. It determines how many jobs there are, whether we can afford food, healthcare, clothing, homes, cars, and vacations. America's economy is the largest in the world. So, what can be wrong with a system that produces more than any other country, which earns and pays more than any other country, and supports the highest standard of living in the world?

The predominant issue facing Americans today is the concern over the future financial health of the country. We are - or certainly should be - extremely troubled by the growing mountains of public debt. This huge growth in our national debt is in major part the result of greatly expanding and dependence-creating social programs, our gigantic defense budget and at the root of the problem a Congress unwilling and thus unable to manage the nation's fiscal policy. Perhaps only the snail-like pace of new job creation is more troubling. Some even attribute the sluggishness in job growth to the nation's ever-increasing debt. Carmen M. Reinhart and Kenneth S. Rogoff of Harvard University created a unique data set of countries' financial crises. They conclude that a unifying problem among the financial crises they analyzed is government debt. They coined the phrase: this-time-is-different-syndrome, that is, the belief that financial crises are things that happen to other people in other countries at other times; crises do not happen to us, here and now. We are doing things better, we are smarter, we have learned from past mistakes. This syndrome is often displayed despite indicators of a forthcoming financial crisis. The American federal government has accumulated a debt of staggering proportions. While the Congressional Budget Office estimates strongly suggest that the federal government's spending pattern is unsustainable, Congress has done little to reign in spending or avert a foreseeable financial crisis.

To better understand the factors surrounding the author's belief that the outlook for America is bleak, and the economy's role in this outlook, we must first define what an economy is. One dictionary defines it as thrifty management; frugality in the expenditure or consumption of money, materials, etc. This certainly does not apply to America, and likely not to most other national economies. Another, more realistic, definition is: the system or range of economic activity in a country, region, or community.

Before going much further however, the author believes it important that the figures cited in this book mean more than simply numbers. It's difficult for the average person to grasp the significance of one billion dollars ($1 billion) much less one trillion dollars ($1 trillion). In this book we will indeed be dealing with billions and even trillions of dollars, as they relate to government programs, spending and debt. In an attempt to convey the true meaning of these astronomical numbers, the author asks the reader to consider the following illustration:

A unit of American paper money, the $1, $5, $10, $20, $50 and $100 bill, all measure about 6-1/4", or .521 feet in length. If one were to take 10 - $100 bills, that's $1000, and lay them end-to-end, it would produce a strip 5.2 feet long. If we extended this strip by 999 new strips, making a total of 1000 strips, all together the new strip would be worth one million ($1 million) dollars, and we would have a strip of $100 bills almost one mile long. If we extended this new, one-mile long strip by 999 times, we would have a strip of $100 bills almost 990 miles long (greater than the distance between New York and Chicago), having a value of one billion ($1 billion) dollars. Finally, if we extended that $1 billion strip of dollars 999 times, we would have reached the figure of one trillion ($1 trillion) dollars, and a strip of $100 bills stretching 990,000 miles or almost 40 times around the entire world. Note that we have used $100 bills, not $1, nor $5, nor $10 dollar bills. Hopefully, this illustration of how these huge numbers relate to our everyday lives will have the effect of startling the reader.

To begin, we will now look at how the economy of a country is determined. The Gross Domestic Product, or GDP as it's more commonly known, is simply the sum of the country's consumption (personal spending), plus (business) investment, plus government spending, plus net exports (exports minus imports). Before the reader's eyes glaze over, and his/her thoughts turn to oh no, another boring, excessively technical book or worse, please permit the author to quickly state that you will want to know more about one of the major causes of America's problems, and also that this book in its entirety, and this chapter specifically, will not be about arcane terms or theoretical issues. Simply put, GDP is the measure of a country's total economic output for a year. America's GDP has averaged a growth rate of almost 2.4% over the last 13 years, with a notable negative growth rate of -4% in 2008. We have climbed back to today's positive GDP growth rate of 1.8%, signaling a slow return to economic growth. GDP growth generally relates to an improved standard of living, lower unemployment and greater earnings. As such, it affects us all. So, this measure of our economy's health is important.

By the middle of 2013, the total American GDP was $17 trillion. For the sake of comparison, this exceeds the GDP of all of the European Union countries combined (The EU is comprised of 28 member countries, including Great Britain, Germany, France, Spain, Austria, the Czech Republic, and other developed nations). The next largest country compared with America by GDP is China, whose 2011 GDP (the last number available) was $7 trillion. Looks fairly positive, doesn't it?

The composition of America's GDP will surprise most people: Personal Consumption (spending) accounted for a whopping 70% of GDP; this includes over $11 trillion for household expenses including hard or durable goods (autos, refrigerators, furniture, etc.). Of this, $7 trillion - much more than half - was spent for services, a significant increase compared with America's historical numbers, and an irrefutable indication that we are today much more of a service- than manufacturing-oriented economy. Business Investment accounted for a bit over $2 trillion (about 11% of GDP); Government Spending accounted for a bit over $3 trillion, almost 20% of GDP, and Net Exports were a slightly negative number, resulting from imports exceeding exports (a negative balance of trade).

A country's economy is largely judged by the growth in its GDP. A growth target established by the government and business as good - that is, reasonable and avoiding inflation - is usually thought of as being between 2% and 3% from year to year. However, it is also believed that a somewhat more rapid growth rate can be attained without causing inflation immediately following a recession or depression such as America has recently experienced. A more ambitious target will hopefully support more rapid restoration of normal unemployment numbers and result in greater personal spending that will accompany increased personal income. As we may have noticed, unemployment has been reduced from over 10% to less than 7% in the past several years. (Note: we will elsewhere define and explore the unemployment numbers as they are determined by the federal government and by other institutions).

OK. We have now defined GDP, compared America's with other large economies, explained GDP's components and looked at America's numbers. So, why is this whole exercise important? What does it mean for us?

Certain economic factors and conditions have a major impact on GDP. Remember, when GDP grows, so does personal spending and our standard of living. Conversely, the absence of GDP growth or a declining GDP will have serious consequences, adversely affecting our standard of living. Let's look first at the factors and conditions that affect the potential for positive GDP growth:

Natural Resources: Without such resources, countries must import those they need. This is costly. Countries such as America that are blessed with an abundance of resources (such as timber and natural gas, among others) are able to use them to produce goods and services that are less expensive than countries that must import such resources. Countries having a surplus of natural resources may also export them to other countries, (such as the Middle-East countries' oil reserves) earning money and increasing their own GDP in the process.

Human Capital: This is the value that people - potential workers - bring to the marketplace. Countries that invest in education, and in developing the skills of their citizens, and creating healthy work and living environments will have a more valuable workforce. Specifically, technical, reading, writing and math skills, the ability to understand and follow directions, and the capability to serve as a leader and cooperate with group members are advantageous in a country's pursuit of increased GDP. A country's literacy rate directly relates to its GDP growth potential. How does human capital directly affect economic growth? Studies have shown that nations that invest in the health, education and training of their people will have a more valuable and productive workforce that produces more goods and services. People who have greater levels of education and training are more likely to contribute to technological advances, which leads to finding better uses of natural resources and producing more goods.

Capital Goods: To increase GDP, businesses must also invest in capital goods - all of the buildings, factories, equipment, technologies, resources such as lumber, concrete, etc., needed by businesses. How