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Business Viewpoint: R. Henry Migliore on the U.S. economy

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The United States has drifted off course from the country envisioned by the Declaration of Independence signed on July 4, 1776. A recent poll of citizens stated that 71 percent of Americans say the founding fathers would be disappointed with present state of affairs.

I hate to say it, but what this country needs is another financial crisis. That's the only way to stop the current course. The national debt from 2008 has gone from $9 trillion to $15.56 trillion. Food stamps under the current administration have gone from 23.5 million to 39.5 million people. All taxes have gone up significantly. This trend has to stop.

I'd venture a guess that in the year 2100, there is a good chance that our dear United States will not exist as we know it today. With the United States in its 239th year and Canada at its 188th year, we are very low on the learning curve. China and Russia, for example, have existed for thousands of years. These societies and others have adapted to change.

I have worked as a consultant and visiting professor in China and Russia. They are bright, shrewd, calculating and have a mindset to look at the future. Our North American mindset is short term, with the thought to only what's just around the corner; we have little apparent interest in the long-term future.

Financial researcher William Bernstein made an interesting comment in an interview for Money magazine: "Young people should get down on their knees and pray for a brutal bear market." Guess what? Prayers are being answered.

All this talk of compromise in Washington is a waste of time and energy because it has no relevance in the long-term future. When politicians do not focus on the issues, market forces take control.

There is a time for reckoning, and that time is now. Why put it off? My July 1, 2008, Tulsa World column makes my point, "All Economic Signs Point to a Recession." At that time the Dow Jones industrial average was in the 14,000 range. With investors expecting a critical adjustment that October, the recession hit as predicted.

The current so-called recovery is just governmental manipulation. Governments do not control economies or jobs any more than they control stars in orbit.

The federal debt since January 2009 has gone from $10.6 trillion to $15.2 trillion today. More debt and no relief in sight means it's only going to get worse. The recent jobs report states that 8.9 million people who want a full-time job can't get one, and 85.2 million people have given up looking for work altogether. That's 94.1 million people not working. Does this sound like things are going well in our country?

Markets need cycles to correct inefficient and bloated governments. These cycles in the United States economy have been in 1836-1843, 1893-1897 and 1929-1942. It has been 80 years now. With 2008's recession and the present Dow in the 15,500 range, an economic adjustment is overdue.

In conclusion, it is time for all of us in America to wake up and take control of our destiny. What we need now is an earth-shaking recession. No one has the courage to make the changes needed. A repeat of 2008 would force us to get our house in order, but prevent a bigger debacle down the road.

Right now, the Dow is in a mystic never-never land of utopia. But it also is only one big world event from crashing back to reality. I have to agree with Allan Sloan in his Fortune magazine column when he says Americans do not have the political wherewithal to make the painful but necessary cutbacks to balance the budget and cut the deficit.

The United States is like a family with over-extended credit cards continuing to spend. At some point the bills come due, so as I say in my book "Common Sense Management," pay me now or pay me later. Doing it now is painful for our country, but waiting to later would create a depression of disastrous proportions.

R. Henry Migliore is president of Managing for Success and the former dean of the Oral Roberts University School of Business.

The views expressed here are those of the author and not necessarily the Tulsa World. To inquire about writing a Business Viewpoint column, email a short outline of the article to Business Editor Rod Walton at The column should focus on a business trend; the outlook for the city, state or an industry; or a topic of interest in an area of the writer's expertise. Articles should not promote a business or be overly political in nature.

Original Print Headline: How to prevent a financial crisis in 2100


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