THE BLOG

A Nation In Structural Decline

08/10/2012 11:15 am ET | Updated Oct 10, 2012

The prosperity of great nations results from a commitment to adequate preparation and planning, and does not result from a passive approach to economic well-being. Economic prosperity is intricately tied to a conducive investment environment, which includes incentives to promote growth and prosperity, including appropriate regulations and a dynamic fiscal environment.

The United States is experiencing fatigue from many years of a very successful and prosperous economy. Many have argued that the recent recession in the United States was cyclical, while others have argued that it was and still is structural, hence the sluggish recovery and persistently high unemployment rate, despite unprecedented monetary intervention or stimulus. The structural explanation makes more sense in the context of a very weak post-recession economy and persistent unemployment.

At the expense of its citizens, the U.S. government continues to incentivize leaders of industry that choose to outsource significant sectors of industry that should otherwise be viewed as critical to the competitive advantage of the United States. Outsourcing has always existed and will continue to exist; however, some industries within every developed economy must be acknowledged as being important and in some cases critical to the sustained development and survival of the country. In effect, preservation of industry is in the national interest. Short sighted or myopic and somewhat selfish and self-serving views on the economy and outsourcing are detrimental to the long run sustainability of the United States. The majority should not have to suffer at the mercy of a growing group of industrialists who believe that cost and profit or shareholder wealth are the only virtues that a company exists to fulfill, and are willing to mortgage the future of the country in pursuit of this end.

Many countries have chosen to attract investments by creating the necessary incentives for businesses to relocate to their country through liberal policies and targeted tax incentives. Two noteworthy countries are Ireland and Singapore. Both countries have successfully attracted significant capital investments from U.S. companies. Why won't the U.S. government create similar incentives in this country, considering the abundance of natural and human resources here?

One merely has to look at the example of Germany, an old economy, with approximately 60 percent of its Gross Domestic Product (GDP) stemming from exports. In contrast, the U.S. exports stand at only 13 percent of GDP. This disparity between the U.S and Germany is not accidental, but rather a result of preparation and planning by the German leaders. The German government has successfully created appropriate incentives to encourage growth and development in their private sector. The loss of a significant manufacturing base is a significant problem for any country; when companies leave, it takes a very long time to bring them back if ever they return.

The U.S. remains a great nation, all be it, a nation in structural decline. The U.S. is like a patient that is hemorrhaging and in dire need of emergency surgery; however, the leadership is paralyzed and in a political quagmire. A national effort is necessary to stem the tide of a growing underclass, unaffordable tertiary education or education that is out of reach for the majority and the absence of adequate incentives to promote growth and development. American citizens are yearning for leadership with a vision for the country that is capable of national policies that are long range in nature that focus on lifting all Americans up and tapping into the ingenuity in the people and at the same time tap into the vast array of resources that this country has to offer.