USA...CHANGE FOR the BETTER

Can Obama change America and the world is the question on the lips of everybody. He has a will to change everything that has caused slide in what Americans fondly believe in. He has the backing of the largest section of Americans and the rest of the world for bringing in a change for the good. His taste for simple style of living: that came to him by virtue of his average American background helps him understanding the seemingly simple problem every American is facing today. I think he can change America for better. His task will be simple if he understands the basics without many technicalities.

Once the pride of America, the US Transnational companies that oiled the American wheels of progress are facing critical challenges and this has led to loss of jobs to millions, the mortgage crises, that left millions of home owners homeless and drastic decline in growth all round. The companies which fed the American treasury and played a key role in the emergence of American as the sole surviving super power are now looking to government support for survival. The American banks are in doll drums. Assessment of the economic gloom across the US gives us an impression as though the US is collapsing inwardly.

In order to rescue the system, one needs to analyze the possible reasons for such a sorry state of affairs,

Excessive Military Spending:

America was never threatened with direct confrontation after the collapse of the Soviet Union. However, America is embroiled in direct and indirect wars, which cost the American tax payer unbelievable 711 billion dollars. Where as total global military spending of 1473 billion dollars in 2008. America spends 48% of world total in respect of global military spending. Be it middle Iran, Iraq, Afghanistan theatre, America bled heavily and damaged itself. While efforts have been made to avoid wars and confrontations, much reliance has been placed on the armed might of America to fight global or national causes like terrorism. The heavy spending for fighting direct and indirect wars contributed to the American collapse. A country like China with more than a billion population, spent hardly 122 billion dollars in military spending in 2008. It clearly shows that despite the hefty spending an average American is as much subject to war risk as any other citizen in the world. US need to explore peaceful possibilities for ending global conflicts and global concerns like terrorism.

High per-capita consumption levels:

US citizens' per capita consumption of electricity, food, fuel is a number of times more than the world average. While the dollar strength helped American way of wastage and excessive consumption, the dollar weakness has led to decreasing spending capacity. For example average American consumes 1046 Kg of grain against average Indian consumption of 178 Kg annually which shows 5 fold per capita consumption of grains in US against the world average. It does not mean that Americans eat 5 times food compared to Indians. It means they waste at least 4 times food than they consume. Estimates for the ratio of per capita consumption by US citizens to that of citizens of lesser developed nations range from 10:1 to 30:1 or even higher. It depends on which nations are being used in the comparison, and what data are used for estimating per capita consumption.) So Americans need to moderate their consumption levels that allow no wastages like other nations. Per capita energy consumption in the US is 327.49 annually against a measly 10.73 BTU in India. In many respects the average per capita consumption levels vary from 10 to 30 times of many nations average per capita energy consumption. Instead of justifying such profligate energy consumption levels the US need to moderate so that citizens can have disposable savings by proper spending habits.

High dependence on imports:

With China emerging as major global manufacturing base, Americans chose to get the goods manufactured outside the US because of low cost of production, which in turn led to the reduced domestic demand for the American made goods, there by causing flight of jobs to Asia and the rest of the nations. The trade imbalance between US exports and Imports has adversely affected the American economy.

Failure to monitor the business and industry:

Lack of proper monitoring and control and supervision over the economic empires, which resulted in financial irregularities that wiped out billions and billions of savings and investments. The fall of Dow Jones and other major indices due to the alarming state of the companies had their ripple effect on the world markets too. Believing in free enterprise, the Americans never doubted that there is a variance in the stated and actual performance. It is the American or American inspired or controlled business men who caused the rise in commodity prices where speculation led the market pricing instead of genuine demand versus supply. There is need for stringent regulations for controlling the abuse of opportunities by some so as to prevent damage to the savings and jobs of millions.

The above are the major reasons for the collapse of American economy. It is unfortunate that Americans never realized and took corrective action before the actual collapse. Had the successive administrations brought about moderation spending this situation could have been avoided.

There alternatives were not seriously explored. Let us see how;

Military spending: Wars or military solutions are after all not the best solutions for solving global issues like terrorism. It is the failure of American leadership to take the rest of the nations for solutions other than involving military means. The American belief that they know the best and their feeling of invincibility and inability to explore peaceful alternatives always led them to opt for means that are very costly for the Americans as well as the rest of the world. After all the spending neither America nor the rest of the world is safe from the problems that existed. Moderation in American military spending for fighting global causes and wars could have saved the situation.

High Per Capita Consumption levels: Leading a happy life is one thing. Having extravagant spending style is another thing. We all know that the average American consumption of goods and services is multifold compared even to the developed nations in Europe. America needs to live in a real world and follow policies of moderation with respect to consumption levels.

High Dependence on Imports:

While American Industry is capable of producing the best for the American consumers, yet America has encouraged the low cost imports from China and other nations. Now the Americans import everything and any thing, whether it can be locally produced or not. This has led to the slow down of demand for the domestic goods and services. The range of products that America imports in vast quantities include Cars, garments, chemicals, Oil and its derivatives. Unless the Americans start looking inwardly for meeting the domestic demand for goods and services once again, soon the famous brands of America like Ford, IBM, may vanish in the thin air.

American belief that free enterprise without limits is the best for them has led to excessive confidence on the integrity of individuals running businesses and industries. The public as well the government never felt the need to implement the policy 'trust but verify'. It trusted those who matter in the industry and business endlessly and found at a heavy cost that the trust was misplaced and failure to verify is the reason for the downfall.

In conclusion, we can say that moderation in spending, moderation in consumption levels, moderation in lifestyle, trust but verify policy, domestic encouragement to American goods and services, preference to peaceful means for resolution of global conflicts.

America may temporarily suffer from the setbacks, but sure will bounce back with proper corrective steps that make the system foolproof against moderation and exploitation by others. Obama needs to be guided by the principles of heart rather than mind to salvage the American pride and prestige and restore American legacy.