ECONOMICS - A Rich Nations' Worst Enemy

"Why rich nations may be their own worst enemy" PBS NewsHour 10/27/2016

Excerpt

SUMMARY:  Economist Todd Buchholz rails against what America has become:  a people who want everything but aren't willing to pay for it.  In “The Price of Prosperity,” he suggests that wealthy nations such as the U.S. inflict harm on themselves, even cause their own demise, by racking up debt, having fewer children and increasing governmental regulations.  Economics correspondent Paul Solman reports.

TODD BUCHHOLZ, Author, “The Price of Prosperity:  Why Rich Nations Fail and How to Renew Them”:  Washington, D.C., is a beautiful city, Greek, Roman architecture.  Our society is based on those empires, but they're gone.  So, why do we think that our country is going to defy all of human history?

PAUL SOLMAN (NewsHour):  Because empires, asserts Republican economist Todd Buchholz, are so often forced to pay the price of prosperity.

TODD BUCHHOLZ:  They undermine themselves, and they do that by racking up more debt, by having fewer babies born, [and] by more regulation.  And it's difficult to keep up patriotism as time goes by.

PAUL SOLMAN:  “The Price of Prosperity” is Buchholz's downbeat new book, a dissonant contrast to its upbeat author.

Buchholz was an original investor in the musical mega-hit “Jersey Boys,” author of the bestselling “New Ideas From Dead Economists,” director of economic policy under President George H.W. Bush, pushing economic growth optimistically.

But he rails at what we have become, a people that want everything, but won't pay for it themselves, and, thus, in the first of his symptoms of prosperity malaise, have run up a $19 trillion national debt.  And how exactly?

TODD BUCHHOLZ:  Because people will lend to us.  Because the U.S. is a rich country, we don't seem to have the need yet to discipline ourselves.

PAUL SOLMAN:  But in the future, there will be fewer Americans to cough up the taxes to pay the debt, our fertility having fallen below the replacement rate for the first time in our history.  Low fertility is Buchholz's symptom number two.

TODD BUCHHOLZ:  This was a hospital.  This is where my kids were born.  Lots of D.C. kids were born here, but it's not a hospital anymore.  It's condos.

You know, throughout the world, throughout history, when countries get rich, they stop having kids.

PAUL SOLMAN:  Because Who needs them?

TODD BUCHHOLZ:  Rich countries don't need as many children.  We used to need kids to work in the fields as farm hands, to crawl on their bellies into coal mines.  Well, kids are more like luxury objects now.