Fixing the Economies of China & U.S. They're not that Dissimilar

Yes, China could benefit from a good healthy dose of minimum wage, decent working conditions, pollution controls, code enforcement, intellectual property law enforcement, food quality control, and soon to hear about prescription drug production quality regulation. Yes the United States could benefit from a positive savings rate, lower consumption of everything China makes at the cost of the detriments listed above, a higher investment in more productive education system, among other things. The economies as defined by the people in it and their personal wealth are in a nasty situation with very similar solutions dispite our differences.

China has amassed huge savings as a nation and as individuals relative to their income. This money has been "socked away" in the greatest game on earth - The full faith of the U.S. government. But soon the largest holder of our debt will realize that our spending which as fueled the savings buildup can no longer be as efficiently re-invested by buying U.S. debt.

A couple of MBAs directed by a monkey would likely realize that investing even just the new money from what will stil be a 2009 trade surplus from China's standpoint into domestic infrastructure is the surest way to set the stage for continued 9% growth. Investment in infrastructure, especially first world high technology infrastructure, such as high speed rail, clean energy, automation technologies, and people infrastructure through education will produce steady growth, avoid inflation through technology advances, avoid pollution, and set the stage for net imports to reciprocate on U.S. trade.

On the flip side, the U.S. needs to invest in exactly the same things. We've tried the route that involved selling higher returns to other countries and the game's up. We've already given the low-tech production to China and others, so high-tech is our only hope. Investing in clean energy is just smart from an energy diversification standpoint, and our education system's world rankings speak for their own need of improvement.

So, time for a game change. Sharing these goals will speed the goals and prosperity, but we've got to realize that excellence in the new world is going to require everything that the old world required - only applied to new problems of this century. Its cooperation, drive, competition, and respect - among nations. If we can accomplish this, we'll have accomplished the dream of capitalism which isn't the transfer of wealth in a one-way direction, but the recycling and diversification of wealth to create more wealth and protect that which currently exists. If we don't, we'll have cemented the future which involves the re-pricing of past assumptions of value based on what has recently been discovered to be a largely flawed system of wealth. This alternative would be a no-win situation in which the only winners are those who sell us energy which we buy at a rate equal to our residual wealth and deplete likewise. American's have not much more room to deplete before they quit and take the rest of the world down with them. Let me be clear - the world cannot exist on just America's weekly paycheck - they need it plus the future assurance that ours and other country's paychecks will become bigger. Without that - no growth and no future.