Why is it the USA loves to engage with distractions from it’s own problems?
For the third time in not so many years, the United States of America (USA) once again needs to raise it’s debt ceiling in order for government to continue to function. The resulting inference is straightforward, namely consistent with empirical findings in Acemoglu and Restrepo (2018), the returns that are accruing to the U.S. economy from production activity are diminishing (references for citations at the end of this post). The World Bank agrees in Easterly and Levine (2001) that a diminution to the returns that accrue from production activity, equivalently a diminution to productivity equates to economic regression.
Economic Fact: The Economy of the USA is in Retrogression, hence the success of that famous slogan, “Make America Great Again” in 2016.
But the USA’s Gross Domestic Product has been growing has it not, you probably wonder? Well, friend, if I may, Economists agreed with Amartya Sen way back in 1997 that neither of GDP Per Capita nor GDP Growth are proxies for economic development (see for example, Sen 1997). They were so certain of the inference, Amartya Sen won the Nobel Prize in Economics in 1998. In stated respect, whereas the USA was ranked the country within which the population was most economically equal in 1979, as at 2016, the USA only is the 22nd least unequal country in the world, ranking way behind the Scandinavian Countries, Western European Countries, and the USA’s immediate neighbor, Canada. On the chart below, which is from Obrimah (2021), commencing at RCI=0 on the x-axis, economic inequality amplifies both to the right and the left of RCI=0. Whereas countries to the ‘far left’ of RCI=0 are developing countries, countries to the ‘far right’ of RCI=0 are developed countries that have begun to retrogress.
Rather than engage with the evidence, as such focus on effort for the stimulation of innovation, technical change, and the resulting improvements to productivity, the USA is spending all of it’s energy strategizing towards a checkmating of each of China and…