The US is in deep shit. However, if we're willing to take the necessary steps, we can recover from the mess we made.
The mainstream media is filled with emotionally-driven, over-simplified proposals for fixing a very complicated problem. We are inundated with single-brain-cell solutions such as deporting illegal immigrants, defending the Bush tax cuts, or simply changing political parties in November.
Newsflash: none of these things will fix our economy. This is all noise to increase media ratings and career minded politicians.
If we are really serious about resurrecting our economic power, we need a 12-step program to address the core of our problems, addictions, and bad habits. Today I will cover Step #1...
Step #1: Buy LocalBy far, one of the biggest cancers in our economy is the trade deficit. Every day we purchase goods or services from foreign sources, we are giving them our powerful wealth in exchange for a short-lived experience.
For example, when we fill our gas tanks with foreign oil, we send our personal wealth to another country and all we have to show for it is a car ride to the grocery store. In this example, our wealth pays foreign salaries to people who buy stuff in their local communities, in turn creating a positive feedback loop within that economy at the expense of ours.
On the flip side, the tank of gas in the US disappears. The same holds true for the cheap crap goods we buy from China: they are ready for a landfill in a mind-boggling rate of time.
So, at the end of this bargain we end up with either nothing or worthless junk, and the other country ends up with real wealth which goes into their economy. Basically, they bleed us to death.
Although global trade is very valuable, we must rigorously pursue a proper balance between buying foreign goods/services and buying local goods/services. Currently, we send far too much more of our wealth to other countries than they are sending to us. This is what we academically refer to as the trade deficit. However, we should start calling it the Black Hole of Economic Death.
Maybe people will think twice about buying the cheapest possible item if they know it's literally bankrupting our economy. Maybe people will pay the extra buck to buy local knowing that this will create solid communities with stable jobs.
Then again, maybe not.
However, we've got to start somewhere. And the only way to heal our economy long-term is to first stop the bleed which has made the leaches our masters. It may seem nice to have cheap gas and super stores. But we are now borrowing back our own wealth with interest from our trading "partners" because it's been sucked into the Black Hole of Economic Death.
I'm not advocating harsh protectionism or tariffs. I'm simply proposing we get back to a point of sane moderation where we eliminate the trade deficit and learn how to build strong local economies. Many parts of the US are supporting local farmers and food. Let's take it one step further and support local everything.
Stay tuned for Step #2 ...