Sometimes it seems like America's main purpose is to bail the world out of whatever troubles -- world war, genocide, tsunamis -- it gets tangled up in.
In fact, the United Nations claims that exactly the opposite is true: America's huge deficits are wrecking the global economy, and it's up to the international community to ride to the rescue.
Our story begins with the surprising assertion that Europe is a country:
UN urges global action on U.S. debtThe accuracy of the article goes downhill from there.
By Elizabeth Becker The New York Times
Thursday, January 27, 2005
WASHINGTON The United Nations has urged all major industrial countries, especially Europe and Japan, to help the United States reduce its twin deficits by spurring their own economies to grow faster.
In its report, World Economic Situation and Prospects 2005, the world body said on Tuesday that the twin budget and trade deficits of the United States were throwing the global economy off balance.This is a problem?
The U.S. deficit is a global problem in part because it is the fastest-growing economy among the leading industrial nations and, together with China, is largely responsible for helping pull the world economy out of doldrums.
But whereas China has become an economic engine through its huge growth in manufacturing and exports, the United States has pushed growth by consuming far more goods than it exports, raising concerns about sustainability.Ah, there we go. Greedy Americans, buying way too much stuff! Question: Who does the Times think is buying all those Chinese exports? Martians? Without America "consuming far more than it exports," China would not be able to export so much. China's growth is made possible by American consumption.
So, America gladly buys what China gladly produces. What's wrong with that?
But the UN report said the problem was more complicated. Letting the dollar fall could spur U.S. growth and lead to more consumer spending there on foreign goods...That statement is the economics equivalent of saying that lead weights around your ankles make you run faster. When the dollar falls, the immediate impact is that foreign goods become more expensive to U.S. consumers, who buy less of them.
...but a greater drop in the dollar's value could hurt the economies of Europe and Japan that need to grow in order to buy U.S. exports and help right the trade imbalance.At last, we come to the U.N.'s real concern: The cheap dollar is making other countries even less competitive relative to the U.S. than they already are. A further fall in the dollar would make foreign goods and overseas labor less attractive, leading Americans to produce and buy at home.
In a logical inversion worthy of Orwell's 1984, hobbling American competitiveness is billed as being in America's own best interest, because once the rest of the world gets really rich, they'll buy our stuff and push down our pesky deficit.
Freedom is Slavery. Ignorance is Strength. Hurting America is Helping America.
Indeed, even as you read this, writes the Times reporter, America is taking action to stave off the threat of its continued success:
The U.S. Treasury secretary, John Snow, already plans to ask for immediate help from the wealthiest U.S. trading partners at a meeting next week in London of the finance ministers and central bank governors of the Group of 7 leading industrialized democracies. Snow has said he will tell these countries that if they are concerned about the U.S. deficit, they should purchase more American goods and services."Asking for immediate help" is an interesting way to characterize Snow's inviting other countries to buy American if they're all that worried about us. Sounds to me like he's basically telling them to get bent.
For their part, the Europeans will argue, instead, that the countries should make a coordinated effort to stop the drop in the dollar, a move that would help spur their own growth but one the administration opposes.So what we have here is a plea for America to be less competitive and give Europe a chance. (Japan, maintaining strong sales of cars and a huge trade surplus even at current exchange rates, isn't too worried.) And the U.N.'s dressed it up as a call for an international response to American greed and mismanagement. Sheesh.
The report urges the major industrial countries to work out a solution that will help the United States reduce its deficits by spurring their own economies to grow faster, especially Japan and the countries of Europe.
Asking the U.N. to judge your fiscal responsibility is like hiring Michael Moore to be your fact-checker.