We Americans can only harken back to the golden years of American wealth. Remember back when this nation could build the Interstate Highway system, put large and expensive craft into space, invest in research that led to the birth of this medium, the Internet? We can only hope those days are not gone forever.
Meanwhile we can watch to see what the new generation of wealthy nations is doing with their cash. The biggest of the Fat Cat Nations: China. No national debt. Plenty of cash reserves, much of it in American assets.
They're building more and more railroads! And trains. Not buying iPods, SUVs or a world-beating military. Trains. Last year China spent about $50 billion on railroads. They expect to nearly double that this year. To establish a little rail scale: the American budget for Amtrak barely tops a billion dollars annually. The spending there will be part of the Chinese economic stimulus package, and that's just as controversial there as here. Except nobody gets to filibuster in China. Criticism comes from those who think 4% on education and healthcare is a mite miserly. OIL WEALTH FOR WHAT? Oil rich Norway is coming off four great years of oil-driven revenue. They expect a fall-off this year. Yet spending on health, education, railroads and alternative energy will increase. Seems Norway expects to eventually run out of oil and they're planning ahead. Norway deliberately uses taxation to encourage purchase of more fuel efficient autos, they'll give a tax deduction for low emission cars. There'll be a parallel tax added for cars with emissions above 250 grams carbon per km. The government there is also supporting research and working projects for carbon capture and storage. And over in the United Arab Emirates all those petro-dollars are flowing like, well, like oil. And the sun shines. Every day. So they're going solar. UAE keeps dealing with those pesky budget surpluses. One answer: build stuff. Like the world's largest solar hot water system in Abu Dhabi. 1.3 million litres of hot water per day, serving up to 40,000 people, they say. Or perhaps a "solar island" is more appropriate? It's under construction in Ras Al Khaimah to produce around 250 KW of electricity. It's to begin operation this year. The island, 88 metres in diameter, is built inland but floats on water for cooling purposes. Author's postscript: I invite readers who think I'm pro-China to compare the per capita military spending of the U.S. and China. Further I find the economic and political rise of China to be the most frightening global event since the fall of the Berlin Wall. This is a regime that devalues individuals, despises personal freedom from sex to religion, trashes the environment, ignores future repurcussions and embraces pollution for wealth. When somebody gets caught poisoning baby's milk they are executed. There is no sense of prevention or public welfare. Yet, I do think it is critical for the U.S. and other developed nations to note when China is doing something that is making it more powerful, like dominating solar component making or building more railroads.