Energy Technology Expert

How the US could regain its lost economic power – follow Italy’s example

The only way for America to regain its lost economic power is to follow Italy’s example : reduce public expenditure and raise taxes at the same time to reduce the deficit and ensure sustainable economic trajectory.

1) Devalue the US dollar to make your exports competitive and imports expensive since under World Trade Organization (WTO) it is not allowed to impose quantitative restrictions.

2) US workers accept a 50% cut in salaries, wages and benefits since devaluing the currency is not enough to make US production of goods and services competitive. You need the combined effect of devaluation and salary cuts. This will counter-act the undervalued Chinese Yuan (6 RMB currently to 4 RMB correct value per US dollar according to experts).

3) US to print only US dollar notes to purchase domestic US gold production and to convert foreign exchange earnings from its exports – the US dollar must be backed by gold and forex earnings so that it will not fuel inflation.

4) Raise taxes to previous levels that made America super power. Remove the tax initiatives that were due to populist referendum – restore the levels of property tax, income tax, inheritance and donor’s tax, corporate income tax, value added and sales taxes, oil tax, energy and electricity tax and all forms of consumption tax to raise American energy utilization efficiency and process efficiency.

5) Reduce government expenditures (unnecessary governance, simplify rules and regulations, invest in energy-efficient technologies and processes to cut on operating costs).

6) Don’t allow public sector employees with guaranteed pensions and benefits to hold the government hostage in collective bargaining by their public sector unions.

7) Americans buy US-made goods to keep jobs and taxes in America.

8) Americans begin saving for the rainy day and avoid the one-month paid vacation mentality that encourages Americans to buy cheap Asian and Chinese imports in order to fund their yearly vacation to paradise.

Our country made the above difficult choices in response to World Bank-IMF prescriptions in after the 1996 Asian Financial Crisis; so look now, after 15 years, our country is prosperous and vibrant and is among the 4 countries in the world that did not suffer the 2008 Global Financial Crisis (China, Brazil, Philippines, Indonesia).

Unless America and its Leaders reform, USA is headed for a very long and painful recession, with enormous public and private debt, unsustainable economic development and deteriorating standard of living similar to third world countries. Poverty and hunger and unemployment will be endemic.