Tags: Fiscal Cliff | Mayan | China | US

Dec. 21st Doomsday, Fiscal Cliff and Government Lies

Wednesday, 05 Dec 2012 07:48 AM

By Ashish Advani

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I have a hard time controlling my laugh when I read the blog posting that the U.S. government has just issued on the apocalyptic projections of the world ending on Dec. 21 this year.

The Mayan calendar, which came into existence very long ago, suddenly ends on Dec. 21, 2012. Some groups of people interpret this as the end of the world. What is fascinating is that the same date is also indicated in various other religions and cultures as a date of a major change. No religion or literature indicates this date as the end of the world. Due to the suspense built up behind the lack of information, Hollywood and others have let their imaginations run wild.

What is laughable, however, is that the government needs to step in and validate that the world will indeed not end on Dec 21.

Now that the government has issued this dictum, I feel a lot safer and relieved. NOT!

If anything, my anxiety level has kicked up a notch since I read the blog, because the one thing I do know is that the U.S. government is clueless about the future.

The government (I lump the Democrats and the Republicans together on this one) does not seem to know how to figure out the fiscal cliff, let alone the issues of the end of the world. The games have begun in earnest, with both sides grandstanding already. Each side has publically offered to resolve the deadlock, knowing full well that the other side will summarily dismiss the offer.

As many have forecasted, this game of brinksmanship will be played right to the end, and then the proverbial can will be kicked down the road until a later date. Last time this game was played was with the debt ceiling and we unnerved the world and the United States lost its AAA rating. I wonder what price will be paid for this round of dilly dallying?

The current Republican offer is to reduce the deficit by $2.2 trillion over the next 10 years. Last I checked, the U.S. debt was about $16 trillion. If the Democrats had accepted this offer, we would have needed 80 years to pay down the debt.

Talk about the sense of urgency to really tackle the problem and reach a quick and rapid solution to this massive overhang! The reality of the situation is that neither the Republicans nor the Democrats really want to cut spending or raise taxes (whether we cut north or south of $250,000 limits). Both sides are happy to continue to spend monies so that their voter banks are appeased and their re-election is assured.

Real reforms such as debt reduction (earnest reduction, not lip service), tax code reforms, medical reforms as it relates to litigations, energy independence and honest and consistent foreign policy abroad are not even being discussed in any annals of the government.

While we are busy bickering within ourselves, China is eating our lunch. Let’s look at a simple piece of data: In 2006, the United States was the number one country in the world as the trading partner of the world. The United States WAS the larger trading partner for 127 countries, while China was the largest for just 70 countries.

Skipping ahead to 2012 — the two have traded places. China now is the larger trading partner for 124 countries, while the United States is now the largest to only 76.

Add to this the bilateral currency agreements China has been signing with over 50 nations to trade goods in non-U.S. dollar terms, and we have the writing clear on the wall. The United States has lost its edge and has no clue or plans of how to get it back.

Would you continue to invest in companies that are domiciled and do work in the United States? I would not. The investment dollars have to head overseas and earn a real return for you.

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