US must make cuts or risk economic failure
So, now what – what comes next in solving America’s economic woes and fixing the global economic system?
Author and well known international investor Jim Rogers said the US is in terrible trouble. Congress should act swiftly to cut spending dramatically to save the economy.
“They should take a chainsaw and cut spending. America is going down the tubes,” he commented. “America is the largest debtor nation.”
He said cuts must be made universally, to defense, entitlements, and other areas. No one area can be left uncut.
“We’ve got to cut everything,” Rogers said.
Without immediate and dramatic action, the US and global economies will be unable to prosper in the future. Further crisis will follow unless cuts are made. The government can only print and borrow money for so long.
“I wouldn’t lend any money to the United states government,” he said, explaining that America has to get its system in order or avoid being cut off by global lenders. “Eventually they will stop flat out.”
Rogers argued that more quantitative easing may be on the way, warning however that printing money only leads to higher prices, increased interest rates and inflation.
“Inflation by definition is prices rising,” he said, noting that people should begin to invest not in currency but in commodities that will rise in value – notably gold, silver and other precious metals.
One solution to America’s economic woes would be to hire smarter government workers to make policy. He contended that US government employees are not the smartest group of people. If the government focused its resources and recruiting efforts to target the cream of the crop, the US would create smarter policy.
“Most of the people who go into government in the US aren’t the brightest and smartest people,” Rogers said. “They aren’t very smart people or they wouldn’t be working for the government.”
The big picture solution for the US economy, according to Rogers, would be absolute tax reform, combined with spending cuts and litigation policy reform.
“Cut taxes dramatically. You’ve got to encourage people to save and invest,” he said.