What a miracle: the sequester happened…

Sequester is fact. Let’s hope it is only the first step of the many steps needed to avert the USA from the choking socialism to some more normal and logical type of economy. If you look at American economy in last 20-25 years you will see an increase in government intervention and a decrease in real economy, producing and winning markets. And if you look at the Chinese economy at the same time, you will see exactly the opposite. And that is the difference between socialism and capitalism.

But don’t bewilder who is the socialist and who is the capitalist. Economy is not a matter of human rights only. In politics China is a non-democratic country, ruled formally by a Party that is called “communist”. But in fact this is a classic industrial revolution country – just of the type of British Empire in 19th century. Yes, the government in UK then was not a democratic one, in a way we understand democracy today. And the economy was deeply free and prospering.

USA is a democracy, although some anti-terrorist measures start to threaten this status. But in economy USA is much closer to China of Mao, than is current China. There is much more government regulation, too much social expenses and too much rights without the obligation to work for them. So Americans are more and more not working, and just consuming social benefits from the government. And the entire USA is consuming the social benefits given to it by the largest contributor – China. A country that continues to provide real goods in exchange for valueless pieces of paper called “dollars”.

So America does really need a change. A change it can believe in :) USA needs more real working and less redistribution via taxes and government spending. The right way of thinking must be revived. The thinking was the major damage of former socialist countries of Eastern Europe that collectively bankrupted in 80s. The thinking that government owes something to you had, and even now still has, an eroding influence on the economy and society. USA must learn this lesson. And the working way of learning is some welfare benefits just to be cancelled.

It is hard to believe that after decades of deficits and increasing government spending, in USA starts something like the sequester. In fact it is not a merit of politicians. It is rather a merit of the problems of the politicians. When politicians have problems, the society runs better :) The deadlock between the White House and The Congress has led to a situation when even doing nothing, politicians are making reforms. Automatic spending cuts will happen unless politicians abolish them. So when politicians have problems, the reform is going. It is just the opposite of happening in EU where politicians must enact the cuts, and often fail, under street protests. But for further reforms USA will need some real political will. Anyway, the sequester is a good first step…

Dobri
March 1st 2013

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