It seems to me….
“To get away from poverty, you need several things at the same time: school, health, and infrastructure – those are the public investments. And on the other side, you need market opportunities, information, employment, and human rights.” ~ Hans Rosling.
The national economy and sense of well-being is on a downward slide that has accelerated in recent decades. Manufacturing has mostly vanished as factory jobs have largely disappeared from the interior of the U.S. where they anchored cities and counties from World War II through the 1980s.
There is an old adage about not eating your seed corn. Farmers always knew to never eat all their corn. Some always had to be saved as seed for planting the following year so as to forestall starvation. Eating one’s seed corn was a desperate measure since it only postponed disaster. Today, the expression “eating your seed corn” refers to any desperate action that creates a disastrous situation in the long-term done in order to provide temporary relief.
But recently, that is exactly what we have been doing: eating our seed corn. Medium- and long-term effects of massive drops in public investment comes on the heels of decades of declining spending (as a percentage of gross domestic product) on infrastructure, scientific research, skills training, and core government agencies. The U.S. can’t coast on past investments forever.
Many cities have fallen into decline. Starting after World War II, the government and industry promoted suburbia abandoning scores of cities to the mostly non-white poor (white flight). Detroit’s carmakers bought and dismantled public transit which led to today’s costly transportation system where a nation of commuters purchase expensive private vehicles, gas, insurance, and spend hours away from home.
Healthcare cost increases have left wages frozen. Average wages have not risen, after being adjusted for inflation, for decades primarily due to healthcare cost increases impacting middle- and lower-class wealth.
Public education is vastly underfunded. Suburban schools in wealthy enclaves might be highly rated, but nationally, half of high school graduates are not at the same level as graduates of other countries and their better achieving peers foreclosing opportunity.
The government is not reinvesting in America. This is not simply about neglected roads and bridges. The U.S. government supports a bloated military-industrial complex that accounts for 40 percent of global spending on weapons. This may be domestic spending but it is not spending on domestic needs.
Decades of criticism, Congressional micromanagement, and underfunding have taken their toll. Agencies such as the IRS are now threadbare. The Census Bureau is preparing to go digital and undertake a new national tally but is hamstrung by an insufficient budget and has had to cancel several much-needed tests. The FAA lags behind equivalent agencies in countries such as Canada and has delayed upgrading its technology because of funding lapses and uncertainties. The list goes on and on.
The prospects for discretionary spending look dire, with potential cuts to spending on roads and airports, training and apprenticeship programs, healthcare research and public-health initiatives in addition to numerous other programs.
While the U.S. economy’s position relative to other nations has actually improved in recent years. Over half of the world’s top 100 companies are now American, and those that dominate the digital age – Google, Facebook, Amazon… – are almost all American. But the U.S. has not invested nearly enough in its workers – in their skills, education, infrastructure, and access to capital – so that they could prosper along with the country’s corporations.
The U.S. government spends a pittance on job retraining and related measures: 0.1 percent of our gross domestic product compared with 0.8 percent in Germany and a staggering 2.3 percent in Denmark. The U.S. spends a lot on education, but inefficiently and mostly for the already wealthy and well-prepared children. Infrastructure is bad, and public transportation worse, so workers cannot move easily to new jobs. Those types of investments would allow U.S. workers to share in the prosperity of the general economy.
Unfortunately, recent federal budget proposals did little to correct many of those problems and, in many ways, only served to make them worse. E.g., some of the 2019 proposals were:
A 42.3 percent cut to all “non-defense discretionary” spending, from the currently planned level of $756 billion in 2028 to $436 billion. This category includes funding for government agencies like the Environmental Protection Agency and the State Department, certain safety net programs like Head Start, law enforcement spending at the FBI and Department of Justice, and scientific research through the National Institutes of Health and National Science Foundation.
A 33.7 percent cut to the EPA, a 29.5 percent cut to the National Science Foundation, a 22.2 percent cut to the Army Corps of Engineers (a major infrastructure program), a 21.4 percent cut to the Labor Department, and a 26.9 percent cut to the State Department, among many other discretionary spending cuts.
A $777 billion boost to defense spending over 10 years, supposedly partially paid for by reducing “overseas contingency operations” spending (also known as the war budget). By 2028, total defense spending will be lower, but over the next few years it will be significantly higher (7.9 percent higher in 2020, for instance).
A 7.1 percent cut to Medicare by 2028, due to reforms meant to cut payments to providers and reduce wasteful treatment without limiting access to health care. The Affordable Care Act in 2010 included many similar provisions with related goals.
A 22.5 percent cut to Medicaid and Affordable Care Act subsidies by 2028, through repealing and replacing the Affordable Care Act (Obamacare).
A 27.4 percent cut to SNAP (food stamps) and a 20.1 percent cut to Section 8 housing assistance by 2028.
The U.S. once again is considered to have the most competitive economy in the world, the first time it has topped the ranking since 2008. It ranks first overall in the world in three of critical areas: business dynamism, labor markets, and financial system. It comes second in another two; innovation (behind Germany) and market size (behind China).
But this only serves as a façade shrouding a weakening social fabric…and worsening security situation (ranked 56th): the U.S. has a homicide rate five times the advanced economies’ average. It is far from the frontier in areas such as checks and balances (40th), judicial independence (15th), and corruption (16th). Rounding out the top five most competitive economies are Singapore, Germany, Switzerland, and Japan.
And little or nothing is being done, or even proposed, to improve our obvious failings in other areas. These kinds of funding proposals will not help solve the problems currently facing us. It is merely a further example of eating our own seed corn.
That’s what I think, what about you?
 Hans Rosling was a Swedish physician, academic, statistician, and public speaker.
 Alden, Edward, and Bernard L. Schwartz. How America Stacks Up, Council on Foreign Relations, http://www.cfr.org/competitiveness/america-stacks-up/p37438, February 2016.
 Whiting, Kate. These Are The World’s Most Competitive Economies, World Economic Forum, https://www.weforum.org/agenda/2018/10/most-competitive-economies-global-competitiveness-report-2018/?utm_source=Fareed%27s+Global+Briefing&utm_campaign=972e46875b-EMAIL_CAMPAIGN_2018_10_17_07_24&utm_medium=email&utm_term=0_6f2e93382a-972e46875b-85658801, 16 October 2018.