Conventional economic wisdom holds that real economic growth occurs when workers become more efficient and therefore generate more value. But the truth is that much of the capital value created by major corporations in the past few years has come, not from efficiency gains on the part of the American workforce, but as a result of tax shelters, offshoring and outsourcing.
These quick-fix schemes have made corporate balance sheets glitter like a desert mirage, but the glare has masked a much bigger problem: America is living beyond its means, importing too much and producing too little to continue to be an economic powerhouse. A quick comparison to China reveals a nation with a real growth rate, in terms of actual volume of goods produced and sold, that dwarfs that of the U.S. in recent years.
We as Americans need to stop deluding ourselves, stop hiding behind our degrees and beleaguered assumptions, and wake up to the fact that this country is on the precipice of a major financial disaster. If we don’t voluntarily tighten our belts, hunker down and make provisions for the future, we might find ourselves lost in the storm on the horizon. And make no mistake, all the signs point to an imminent breakdown of the financial system in the near future.
The rules for tough times ahead call for common sense. No one needs to go see the Wizard of Oz to be blessed with the brains, heart and courage to succeed. Success comes from adherence to God-given virtues of faith, hard work, compassion and humility. These qualities, if upheld on a consistent daily basis, will lift us from this economic crisis of confidence that we now face.
Americans need to admit quickly that they’re living beyond their means and place themselves on a financial diet that can begin the process of weathering this capital market crunch. There is nothing new under the sun. We are no different than past generations that found the courage to survive, made the sacrifices and returned a beleaguered nation to economic and military might.
Visit www.armstrongwilliams.com .