US on the brink of default and bankruptcy; hard to imagine and harder to believe. However, this is the factual reality. A debt of $14.3 trillion is heavy enough to submerge two thirds of the world in bankruptcy leave aside an economy continuously struggling to push up growth and extremely sluggish consumer spending to ward off a recession that has exposed the fragility of their financial system.
The blame of this debacle was squarely laid on George Bush who through his amazing short sightedness had been unable to see the consequences of the American adventurism in Iraq and Afghanistan. The reason for Obama to win was his slogan of change that he successfully chanted across the whole of America in order to dislodge the republicans. He severely criticised their policies and promised a new American formula of revival. Unfortunately, that was not to be. Obama’s handling of economics or politics has been hesitant, dithering or too aggressive in certain areas to help him justify people’s decision that he will bring the change Americans desperately need.
The economy has been ailing for some time and now seems to have started hemorrhaging badly. This is against expectations as the last three quarterly figures were promising. The tax cuts boosted consumer spending and things looked on the up. However, inflation and rising prices of the energy coupled with the stubborn decline in housing market made consumer spending sluggish, causing a decline in the growth rate and increase in unemployment. The economy is so deeply dependent on consumer spending that Obama has been putting in massive amount of stimulus money to spur growth and spending. The auto and financial sector received a stimulus of almost $700 billion and have been subsidised continuously to stave off bankruptcies. However the difference between the spending and earnings has been so great that the government borrowing has gone overboard. Who could have imagined that China would be America’s biggest lender of money?
The big question is where is the money going? Obviously the money needed to fund a couple of wars in Iraq and Afghanistan, where hundreds of billion dollars have been wasted to prove something fictitious, is the main reason why the government is in huge deficit. The political fallacy of continuing to fight wars to annex countries those are weak and small are a huge cost that in the long run was bound to backfire. Obama’s behaviour of a politician, whom all thought was not the traditional big promises small deliverables type, has really disillusioned millions who were carried away by the smooth and poetic rhetoric by the first black man getting a turn to lead the White House. The romantic fairy story of a professorial Obama has crashed along with the economy of America. There is hardly anything to choose between Obama and his predecessors. Obama’s promise to close down Guantanamo within hundred days of his office and the subsequent default of many promises in the next hundreds of days has been reflective of his hesitant style of leadership and his constant giving in to the staunch tradition of the White House of aggression and forced acquisition as a method to remain supreme in the world. The Afghan adventure has been very costly and Obama’s anti war slogan that won him the election has become another slogan that has lost credibility. Obama has personally gone around selling defense equipment worth billions of dollars especially to Saudi Arabia and India to prove his similarity to his predecessors.
With a defeat in mid term elections and his popularity rating dipping to lowest levels, Obama needed another country to attack and another issue to raise his profile. Pakistan with its strategic geographic location, weak and corrupt leadership and a terrorism brand attached was the perfect object of desire for them. The Obama/Osama incident was really a rejuvenator for the president that saw his popularity rising sharply. The very fact that it was mysteriously clouded on the basis of an encroachment on Pakistani soil was evidence of the US having failed in Afghanistan and now turning to another weaker target for its justification of war on terror. Ever since the Obama incident, US/Pakistan relations have really become complex and fragile. However it did pep up Obama’s popularity for a while as he got a make over from an indecisive and weak president to a more daring and doing leader. But this moment of glory did not last long as the dragon of a debt ridden economy reared its ugly head once again and this time with a vengeance of taking the US economy to default; a specter not heard of in many decades since the rise of the US empire. America needs to go back to the fundamentals of what its existence is all about. Its rise as a super power was not based on war and oppression, in fact, every single war has brought its stature down. What it needs is to go back to the principles of an industrial and economic development based on innovativeness, a justice system that provides equal opportunity to all and a real focus on practicing what it preaches. Only then would the process of restoration start.
The writer is a consultant and CEO of FranklinCovey Pakistan and can be reached at [email protected]
