Yuan can't solve US problems

Updated: 2011-10-09 10:39

By Han Dongping (chinadaily.com.cn)

  Comments() Print Mail Large Medium  Small 分享按钮 0

Since the financial crisis of 2008, the U.S. Government has taken many measures to pull the nation out of recession and get the economy up again. It has put a significant amount of pressure on China to value its currency. As a result, China has raised the value of its currency more than thirty percent in the last couple years.

However, the U.S. economy has not improved in any way. The unemployment rate has remained high. The official unemployment rate is about 9 percent, but the actual unemployment rate must be much higher. A recent government census indicated that over 48 millions of Americans between the age of 18 and 64 did not work even one week in 2010.

More than 46 millions Americans, or 15.1 percent, live below poverty, and have to depend on government handouts to survive. More and more Americans are losing medical care and houses. The number of houses being foreclosed is on the rise as a result of the persistent unemployment problem. For ordinary Americans, the pressure of life is mounting.

Two weeks ago, a group of people occupied Wall Street in protest. They argued that the top 1 percent of the population has been exploiting the 99 percent majority. The New York Police Department responded to the protest in a very high-handed manner. It arrested 500 protestors last Saturday, and on Sunday, it arrested 700 more. But the police brutality did not end the protest. Instead it has spread to other major cities now. There were protests in Boston, Chicago and Los Angeles over the weekend. In Asheville, North Carolina, a small city where the author resides, a group of people showed their solidarity to the New York protesters by staging their own version of protest.

In response to the financial crisis, the American Government has been printing more paper money, a form of its own currency manipulation, and also spent hundreds of billions dollars to bail out some banks and financial firms that have been in trouble. However, these measures do not seem to produce the desired results.

Facing these multiple crises, it seems that there is not much else the American Government can do. Like the donkey in the ancient Chinese fable, it has exhausted all its tricks and it is now at a loss about what else to do. However, before it is consumed by the tiger, the donkey is expected to try everything at its disposal even though it may not do itself any good.

As the only superpower of the world, the U.S. has a tendency to blame its problems on others. It wants other countries to take the medication for its illness, and it wants other countries to pay the price for its mismanagement of its finance and economy. The most recent bill the U.S. Senate passed on Monday is to pressure China to value its currency is such a measure again. This bill is arbitrary and unreasonable, and will not help the U.S. solve its financial and economic crises in the end.

U.S. financial crises are caused by factors too many to list here. The most obvious factor is that the U.S. spends too much on its military at the expense of American people's general wellbeing. The U.S. accounts for 5 percent of world population, but its military spending amounts to over 40 percent of the world's total. It is true that the U.S. is still the world's largest economy, but such high-level military spending is reckless and will break even the camel's back in the end.

Number two: The U.S. has fought too many wars, messing with other people's internal affairs, destroying other people's livelihoods, and also causing tremendous damage to itself. Resources that could otherwise be used to improve American people's livelihood were diverted to senseless destructions.

Number three: The American government fails to tax fairly and justly, favoring the rich at the cost of the poor and the middle class. Warren Buffet pointed such out recently. His secretaries who made much less have to pay much higher a percentage of taxes than himself, who owns billions, causing a tremendous gap between the rich and poor in the U.S.

One of the protesters in New York said it as well. America has so much wealth that would allow everybody to live adequately if it had been distributed more evenly.

The U.S. government should stop blaming others for its own problems, and stop forcing others to take the medication for its own illness. Instead, it should start by doing three right things: cut its senseless military overspending, end the senseless wars overseas and give the middle class a break by taxing the rich more. With these three right measures, America will surely be able to solve its problems gradually.

Han Dongping is Professor of History and Political Science at Warren Wilson College, NC. The views expressed here do not necessarily reflect those of the China Daily website.