The Decline of the Dollar
America’s fiscal crisis is complex. Although the economy has always had its highs and lows, the recent subprime mortgage crisis, a $10.6 trillion national debt, and a growing unemployment rate are all indicators that America is in a recession. Though this paper may simplify the solutions needed to help the economy recover, they are based on sound economic principles.
The national debt is the most pressing issue. Debt builds when I spend more money than I make. A national debt is not something new for America, but the size of the debt is alarming. Since 1981, the national debt has increased by a factor of 10. So even in those times when our country’s economy was booming, the amount of our debt increased. Solid financial planning always includes debt management. Currently, America has failed to manage its debt. Fighting two wars overseas, funding unnecessary projects, and the reduction of manufactured goods in America have contributed to this debt. As debt grows, so does the amount of the interest payment. This makes paying off that debt more difficult, since much of the payment is going towards the interest. However, with a lot of diligence, perhaps in 30 years when my children inherit the economy, they will have a debt-free America.
We were not alone in creating this decline. There was much talk and writing for years about how the Japanese seemed to be on the verge of buying America and how the quality of products and services delivered by American companies had been outstripped by foreign competitors, especially the Japanese. TQM (Total Quality Management) programs, made up of approaches to management that originated in Japanese industry in the 1950s, were highly touted. Having observed Japan’s success employing quality control techniques, western companies started to take their own quality initiatives. TQM developed as a catchall phrase for the broad spectrum of quality-focused strategies and programs.
The success of these programs has been slim. Numerous studies have shown that implementing a quality standard rarely improves a company's performance, and my own personal experience validates that.
Various reasons are cited for this failure, because anyone familiar with the standards recognizes that the best practices advocated themselves are not faulty. The reasons cited mainly have to do with American managerial attitudes. The implementations were 'top-down,' imposed from above rather than 'bottom-up' so rank and file employees never had a stake in them, managements created no follow-up programs to measure effectiveness, etc. And all of these reasons are also proximate causes for their failure.
But quality in TQM is often defined as the totality of features and characteristics of a product or service that bear on its ability to satisfy the expectations of consumers. In other words, quality is "giving the customer what he wants." In pre-implementation training, consultants often used McDonalds as an example. Every McDonalds' hamburger, no matter where made or bought is identical. When this example was presented to rank and file employees, they scoffed. They often asked, "What do we need all these new policies and procedures for? We're already producing junk." It was not that the policy was being imposed 'top-down' that alienated the rank and file employees; it was the program's goal. The employees recognized that merely producing junk more consistent would not stem the economy's decline, since junk never competes well with quality. What really caused the economy's decline was the business model adopted by American companies, touted by America's orthodox economists, and aided and abetted by the government.
Ideally, companies exist to provide products and services to people. If the products and services are good, the companies prosper; if they aren't, the companies fail. That's risky, so American companies inverted this model. They fed the public the notion, which has rarely