Why were we so keen to follow the US economic model?

Once the greatest economic power on the planet the USA is now burdened by huge debt in excess of 14 trillion dollars and in danger of losing its AAA rating. Of course that 14,000,000,000,000 is in USD and one way to reduce it is to devalue the USD. This week following the months before it has seen the USD sink to new lows against the major currencies.

It seems that the pure capitalist model where government is kept small and everything is privately owned (except for money guzzling armed services that it uses to invade oil rich nations with autocratic rulers it has decided it doesn't like anymore) has done little to help America stay strong. China on the other hand has a government that owns and  controls a huge amount of industry, mining and utilities. Not only that, China owns a huge proportion of American debt, which US governments are seemingly powerless to repay.

How can the US government repay its debts? It doesn't believe in raising taxes. And it doesn't believe in owning anything that makes money. But it does love spending money it doesn't own on things that go bang in other people's back yards.

Its governments say it is the defender of democracy and freedom and yet in parts of the US it would seem the only entities with democratic rights are the mega corporations. For instance a well known seed producer can sue a farmer if its genetically modified plant materials are blown by the wind onto his property and fertilise his crops; and a water company can sue home owners for installing water tanks. Where's the justice in these situations.

For a long period during the 1980s, 1990s and early 2000s other western countries like Australia and New Zealand moved away from their 'socialist' style governments to a more US styled democracy, selling or privatising their assets. Fortunately they did couple this with fiscal responsibility, keeping foreign debt under control. But if a government has no assets what is it going to do when times are tough and tax income falls? It ends up borrowing money (or selling bonds).

The path to true wealth is simple. You need to create and grow multiple income producing assets. Don't look at the capital gains aspect of the asset's value but rather look at the residual income from things like interest, dividends, rent or turnover. Governments should do the same. They should own banks, utility companies, businesses and rental properties. They shouldn't try to weaken private enterprise or lessen competition by doing so but they should also keep big business honest, especially in areas where competition has been reduced. But government enterprises do need to be more closely monitored, to keep them competitive and free of corruption.

By not limiting itself to borrowing or taxing to raise income our governments could also achieve remarkable GDP growth  and improve the living standards for all citizens. That's what democracy is all about.