Assume you are the President of the United States. Employ the strategic thinking process to develop the best strategy for the United States to avoid the fiscal cliff and to put the United States economy back on track. Reference the classical strategic thinkers (Sun Tzu, Causewitz etc.) in your analysis.
Current Situation
As President Obama, one cannot help but think in terms of both defensive and offensive stances in order to salvage the country from its huge, national debts. The US congressional gridlock and the highest debt level and debt ceilings all cause a major uncertainty in the fiscal management of the country. This also places an upward pressures on the bond markets and the interest rates in the international markets (Conover, 2012).
Vision and Mission
As an optimistic Obama, I envision the debt problems to be urgently solved with the help of the policy makers, especially the US Congress. Hence, the main mission is to settle the gridlock and push on with the best financial solutions with the increased debt rate ceiling. The second mission is to make the necessary reforms in all aspects which contribute to lesser debts and alleviated social and economic conditions for the country.
Strategic and Financial Objectives
Hence, the main strategic objective is to get the US Congress to cooperate in raising once again the debt ceiling. Debt ceiling is the most, upper limit for which the US government can borrow money which Congress will allow (Cox, et. al., 2011). Next is to make the necessary reforms to ease out the given financial problems. In terms of financial strategies, the initial step is to reduce the large budget deficits and over spending in wars. The US also needs to rebuild its industries and resources for the main benefit of its citizens.
Driving Forces and Assumptions
The driving force for these strategies and outlook is the rising interest rates which can be very harmful not just to the US but also to the world financial markets. It also creates an atmosphere of insecurity when the super power is fully indebted to various individuals, investors and institutions around the world (Amadeo, 2012). In the more positive light, the basic assumption in this scenario is that the US economy, as well as the rest of the large economies such as UK, Italy, Greece, Italy, etc., will all soon recover (Neumann & Yoon, 2012). They will help each other in the process of eradicating debt and fostering a more secure financial atmosphere.
SWOT Analysis
The strength that forges the leadership is the strong confidence of the world financial markets in the total recovery of the US economy (Ungar, 2011). However, the social and political conditions in the country add as their weakness (Grant, 2012). The main opportunity is to guard the further increasing of budget deficits and incurring more debts by way of financial strategies and reforms. Threats include the domino effect of the rising interest rates to the international financial markets.
Analysis of Strategic Issues
In analyzing the issues at hand, it is best to employ the classical approaches of Sun Tzu and Causewitz. Obama can make use of Tzu’s “shaping of opponent.” Even when the US is at the downside of the situation, it needs to act as if it can shape the situation to its own vantage point. Another important strategy which Obama can learn from Sun Tzu is the use of speed over the situation. From Causewitz, it is best to apply the defense first then offense approach. Once the president has the go signal of the US Congress, he must act swiftly in making the necessary reforms (Rasmus, 2011).
Recommended Strategy and Implementation
Drastic actions are required to restore American economic and financial independence. First, the US must start to rebuild its own industries. The US industries must initially employ American workers (Zuckerman, 2011).President Obama must also create policies which make it more productive for other exporting countries to compete with its own idustries in its own markets (Economy in Oslutions Website, 2012). This must be implemented in the next three crucial months of his new term. The positive effects should be monitored and enforced within the next six months.
References:
Amadeo, K. September 5, 2012. The U.S. Debt and How It Got So Big. About.com Website. Retrieved on 25 November 2012 from, http://useconomy.about.com/od/fiscalpolicy/p/US_Debt.htm.
Conover, S. January 29, 2012. Why Growth Matters More than Debt. The American Online. Retrieved on 25 November 2012 from, http://www.american.com/archive/2012/january/why-growth-matters-more-than-debt/.
Cox, M., et. al. July 29, 2011. Charting the American Debt Crisis. The New York Times. Retrieved on 25 November 2012 from, http://www.nytimes.com/interactive/2011/07/28/us/charting-the-american-debt-crisis.html.
Economy in Solutions Website. 2012. Economic Solutions: Major Economic Concerns Facing the United States. Retrieved on 25 November 2012 from, http://economyincrisis.org/solutions.
Grant, R. January 9, 2012. No Dr. Krugman, Government Debt Matters Because It's Ours. Forbes Website. Retrieved on 25 November 2012 from, http://www.forbes.com/sites/richardgrant/2012/01/09/government-debt-matters-because-everyones-different/.
Neumann, J. & Yoon, A. August 29, 2012. Credit-Rating Gadfly Leaves S&P. The Wall Street Journal Website. Retrieved on 25 November 2012 from, http://online.wsj.com/article/SB10000872396390444914904577619310645636218.html.
Rasmus, J. November 17, 2011. Predicting the Global Economic Crisis. Retrieved on 25 November 2012 from, http://jackrasmus.com/2011/11/17/the-8-real-causes-of-deficits-and-the-debt/.
Ungar, J. July 29, 2011. Breaking Down the US Debt Crisis: What It All Means. 680 News. Retrieved on 25 November 2012 from, http://www.680news.com/news/world/article/259420--breaking-down-the-u-s-debt-crisis-what-it-all-means.
Zuckerman, M. April 26, 2011. The National Debt Crisis Is an Existential Threat. US News Website. Retrieved on 25 November 2012 from, http://www.usnews.com/opinion/mzuckerman/articles/2011/04/26/the-national-debt-crisis-is-an-existential-threat?page=2.
