The American Dream is a Nightmare

A small portrait of the translator

December 14, 2008 @ 22:18 UTC

Written by

Barack Obama
Economy & Trade

The American dream turns out to be a nightmare. The economy is in meltdown and the true nature of American management is revealed.

Personal debt in the US in April 2008 was at 133.7% of personal income. This is a significant sum – it is around $2.5 trillion. Worse, core personal assets are declining in value – many families now have negative equity in their property and their savings levels are low. Most families are not managing money at all well. Living the Master Card dream is what most families are doing.

They model their behaviour on the Government of the United States, where debt is now running at $10.6 trillion – with some of these debt being held by China (which owns 15% of US debt), India and emerging economies. Soon, US Bonds will be junk bonds.

American management practices and unions have driven key industry sectors into the ground – banking, automotive and airlines being examples. Their ability to be nimble, responsive and most of all focused on ethical management seems to have disappeared. The combined indebtedness of the auto sector, for example, simply boggles the mind.

Obama’s biggest economic challenge is the change the mind set from debt fuelled management, whether of personal finances or business finances, to a more balanced approach which focused on savings (or profit in the case of business), spending less and using debt judiciously. This is a big cultural shift, especially for the post boomer generation who appear to have difficulty comprehending how the financing of the world works. “No we cant” might be a better mantra when looking at a purchase than “yes we can!”

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