I visited the US for the first time 8 years back and living here since some time now. I was awestruck from the first glimpse of this nation and soon realized why this called the land of dreams (the American Dream as you may have heard). After spending some time reading, meeting people and a experiencing US during the visits across multiple cities I got a feeling somehow the "American Dream" is fading. Penning down some of my observations.
1.
Income Inequality - Income disparities have
become so pronounced that America’s top 0.1% now average nearly two hundred
times as much income as the bottom 99.9% percent. This gap between the
super-rich and poor is increasing at a pace never experienced before. A
progressive tax system should function to narrow income gaps between the
affluent and the rest but per the statistics apparently American tax system hasn’t
done any narrowing.
2.
Corporations Funding political parties which is
defeating democracy - In other words large corporates funding US elections is
making America less democratic. What the
public wants does not typically impact what the U.S. government does. The
policies or regulations are potentially built by the government and the
regulators to favour the corporates who fund the elections. Citizens become convinced
that the government is only serving and representing the interests of the rich.
Political candidates and parties are relying more on deep pocketed campaign
donors than at any other time before. As the rich become richer and secure more political influence, they
support policies that make them wealthier at the expense of everyone else.
3.
Political lobbying - It is now routine for the interests being regulated to control the
regulators, which makes things much easier on the regulated.
4.
Raising Debt – US is on the verge of breaking
the $20 Trillion debt mark. To feed the expanding debt, the whole economy has
to grow i.e. manufacturing, sales and consumption all must increase. Businesses
have to expand to stay afloat. But since the money scarcity and debt pressure
keeps increasing, economic growth becomes more and more of a squeeze play. The
trend is to cut the work force, cut wages, cut benefits, cut the quality of the
product or service, and of course, outsource the labour to foreign countries
with low wages and poor labour protection—anything that can be done to get more
out of less.
5.
Corporate tax structure – Large corporations can
legally avoid taxes due to the sheer tax structure. Please note I’m not talking
about avoiding taxes by setting up offices in tax havens here. Simple math:
Individuals pay their taxes first and then consume/spend the rest whereas
corporations consume/spend first and then pay taxes. This flaw is basic taxation
is also leading to disparity of income in the US and across the globe.
6.
Consumption based economy - The US is a
consumption-based economy and it is a consumption-driven society. Consumption
is an economic function that is defined as the value of all goods and services
bought by people. In the recent past progress of a nation is determined by the
performance of a country in terms of consumption level. The underlying theory
of a consumption-based economy is that progressively greater consumption of
goods is economically beneficial. But this theory is only partly true. Being self-reliant
in true sense will ensure sustainable economic conditions in the long run. Neither
extreme is sustainable for any economy re: China a production based economy and
US a consumption based economy.
7.
Inappropriate Marketing – Advertising should be
informative for the customers and not a “Dog & Pony Show” highlighting the
rosy picture to sell a product. Obsessive consumers are not born, they're
formed by advertising. E.g. If you’re selling a car showcase the features of
your product or do a comparative analysis with other cars in the segment why do
you want a sports star or a film star to sell your product. Informative
advertisements would result in rational decisions these ads provide no
information and promote irrational choices.
8.
Luxuries considered as necessities – The
viewpoints of people from different backgrounds and upbringing will differ a
lot here e.g. clothes dryer, dish washer, home computer, microwave etc. are
considered to be necessities in the developed worlds. More and more products & services are
considered to be a necessity e.g. a summer and a winter vacation is preferred
over taking a break and planning a get together with family and friends. Upgrading
you smart phone, laptop, car etc. after paying of the EMI on it if becoming #thetrend of the day.
9.
Cost of living - With a rise in nuclear families
or single parent and both parents working household’s expenditure on labour
saving items is increasing. In addition nuclear families lead to increase the
process of rent & real estate (housing is generally a significant portion
of one’s household expenditure). Over reliance on private transportation not on
public transportation which increases the demand of not only oil but various
other goods and services related to purchasing, owning and maintaining ones
vehicles. This also adds to ones cost of living.
10.
Expensive health care and education system –
Good health care and education system are the key pillars for a sound and
sustainable economic progress. Unfortunately in the US these requirements or
rights are widely unintentionally denied due to them being very expensive (my first-hand
experience is medical care is too complex to) for the vast majority of
citizens.
Like every other nation there are positives and negatives here too but what is important is how the people and the leaders turn things around.
Best wishes everyone!
