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While this article does not strictly deal with personal finances, I believe it is worthwhile to take a step back once in a while and examine what is going on in the economy on a larger scale. This gives us a perspective on how we fit into the larger scheme of things, and can provide us direction on how to proceed with our own lives. Bill Staton’s article on the US economy reveals some positive aspects that you won’t hear about in the mainstream news media, and may just give you the confidence to achieve the success you dream of. Our country is not in as dire straits as the TV pundits would have you believe…

The US Economy
by Bill Staton

The U.S. has a powerful, growing economy, yet we project the ‘wrong path’ image of an aging society drowning in debt and burdening the world with risk. This gloomy fiction distorts our domestic and international economic policymaking. We should reject it and launch a more energetic vision of global prosperity built on economic freedom and dynamism.

The U.S. is the world’s biggest producer, exporter, seller, saver and innovator. On average it adds 30% more to global GDP each year than does all of Asia (45% more in 2006), with one-tenth the population. U.S. employment, wages and profits are at record levels. We’re the biggest source of foreign aid and the only major source of its most effective component: private donations.

Despite dire fiscal predictions, the federal budget is on a trend that could bring it into balance at the end of the decade, with a debt-to-GDP ratio well below the Clinton Administration’s average. Talk of our recklessly low `savings rate’ circles the globe yet arbitrarily excludes the economy’s trillions of dollars of compound gains. Calculated properly, U.S. households have more financial savings - and in most years add more - than the rest of the world combined.

The loudest hue and cry is over our trade deficit, which is blamed for dragging down our economy, as well as everyone else’s. Yet the view that our trade deficit costs jobs and adds to global financial risk can’t be reconciled with our 4.5% unemployment rate and the eager flow of long-term, low-cost foreign capital into U.S. investments. –David Malpass, chief economist, Bear Stearns & Co. Inc.

Bill Staton is chairman of Staton Financial Advisors LLC, a money management company, and publisher of Staton’s E-Money Digest, a weekly ezine on personal finance and investing.

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