The concept of market economy is in trouble. Economies based on Anglo-American model prospered for centuries under the concept of ‘laissez faire’, thanks to Adam Smith. Although the application of the concept did overcome some challenges in the past, the recent credit crunch the following financial crisis and the prolonged recession have become the biggest threat that we ever had to face. Some even in the pioneer nations such as the UK and USA have begun to question the continuity of the free market concept. The core principles and philosophy of the concept of market economy are, however, not to be ditched. It simply needs to be transformed to suit the emerging needs of the new century. The market economy model still has great potentials if its application is effectively regulated, particularly in the areas of credit and debt factors that essentially fuel the overall operation of the economy. Author would like to see the arrival of Regulated Market Economy (RME).

1. No, this time it is the end
of American Hegemony

2. Didn’t We Have a
Revolution in The West?

3. • Industrial Revolution in Europe
• New Technology and Railways
• Protestant Movement
• Colonial Enterprises
• Revolt Against Establishments
• Political Liberalization
• Adoption of Democratic Values

4. Advanced Production and Process Technology.
Bretton Woods Treaty and the Reserve Currency
Status of US Dollar.
Economic Liberalization and International Trade.
Growth of the US Military Machine.
Expansion of the US Multinational Companies.
Free Market Capitalism and Growth of Credit.
Individual Freedom to Earn and Spend.
Marketing Innovation and Birth of Consumerism.
Revolution in Education
7/20/2014
Please read 'Sovereign. Debt Crisis and
Economic Sustainability'

5. Post-war Political and Economic Leadership.
Primacy of the US Dollar (BW Treaty).
Financial (market) Deregulation and
Innovation.
Export of Free Market Capitalism Abroad.
Growth of the Housing, Automobile and Other
Service Sectors.
Defence-led Economy and Military Exports.
European and Japanese Economic
Resurgence .7/20/2014
Please read 'Sovereign Debt Crisis and
Economic Sustainability'

6. Employment Opportunity and Income Growth.
Enviable Public and Essential Services
Provision.
Adequate and Quality Infrastructure
Development.
Affordable Housing Provision for the Majority.
Public Housing, Free National Health Service,
and State Pension in Europe.
Parliamentary Democracy, Independent
Judiciary, and Bill of Rights.
7/20/2014
Please read 'Sovereign Debt Crisis and
Economic Sustainability'

7. Safety Net Such as Unemployment Benefit and
Income Support.
State Pension, Medicare, Medicaid, or Free
Health Care as in Britain.
Unprecedented Boost to Quality of Life.
Free or Affordable Education for All.
Growth of Discretionary Income and Spending
Power.
Freedom to Choose, Speak and Gather.
7/20/2014
Please read 'Sovereign Debt Crisis and
Economic Sustainability'

8. The Goodtime is Over? It Seems Difficult to
Sustain (fifty-fifty chance) the Status Quo.
The Prolonged Crisis and Economic Stagnation
is a Real Threat.
With all the Textbook Measures Taken, the
Economy is Still Struggling to Regenerate.
Free Market Capitalism has Reached its
Saturation Point in the West.
Sustaining the Status Quo Requires Innovation
and Restructuring of the Market System itself
and How We Generate Wealth in the Economy.
7/20/2014
Please read 'Sovereign Debt Crisis and
Economic Sustainability'

9. End to the Lavish Credit-led Consumerism.
Unemployment, Consumer Debt Burden, and
Growth in Personal Bankruptcies.
Substandard Public Services Provision.
Soaring House Prices, Unaffordable Higher
Education and Crumbling National Health
Services.
Crumbling Infrastructure (highways & bridges).
Ageing Population with a Meagre Pension and
Uncertain Future in the Horizon.
7/20/2014
Please read 'Sovereign Debt Crisis and
Economic Sustainability'

10. Reverse Impact of Globalization (negative impacts).
Deregulation Impact of the Financial Sector.
High Cost of Labour and Manufacturing Leading to
Outsourcing Production Elsewhere.
Adverse Impact of Creative Marketing that Perpetuates
‘Destroy and Build’ Mentality.
Credit-led Over-consumption .
Reckless Spending by the State Using Borrowed Money
(31% of total spending in the US is borrowed).
Growth of the Military (war) Machine.
High Cost of Welfare Budget (including a costly state
pension system).
7/20/2014
Please read 'Sovereign Debt Crisis and
Economic Sustainability'

11. The Hegemonic (economic) Lifecycle Flirts with
Decline (downward trend).
The Treasury is Empty (USA, UK, Japan, etc.)
Unprecedented Level of Sovereign Debt (almost
100% of the GDP in USA & UK and 230% in
Japan).
Widening Current Budget Deficits (6%of the GDP).
Huge Debt Service Payment Even with Low
Interest Rates (reaches 50% of Revenue in
Japan).
Widening Gap in the Balance of Trade (deficit).
Failing Monetary Policy Measures and Huge QE or
Asset Buying-spree.
7/20/2014
Please read 'Sovereign Debt Crisis and
Economic Sustainability'

12. 7/20/2014
Please read 'Sovereign Debt Crisis and
Economic Sustainability'
Zeroing Interest Rates (lowest in history) and Still
Being Ineffective.
Obsession with Inflation Targeting.
Still High Consumer and Business Lending Rates.
Proliferation of Financial Services Products and
the Lack of Regulatory Oversight.
Open and Global Financial System Affecting the
Nation-State Economy.
Central Banks Churning out Stimulus Packages,
Including ‘Quantitative Easing’.

13. High Tax Burden on the Average Wage-Earner.
Difficulty in Balancing the Current Budget.
High Rates of Value Added Tax in Europe.
The Highest Income Tax Rate in EU Countries
Exceed 75%.
Complex and Difficult to Comprehend Corporate
Tax Codes (thousands of pages).
Corporate Tax Loopholes: Tax Fraud and Evasion
with the Help of Clever Accountants and Lawyers.
The US still Boasts One of the Highest Corporation
Tax but Legislative Loopholes Helps Tax Evasion.
7/20/2014
Please read 'Sovereign Debt Crisis and
Economic Sustainability'

14. An American Big Bang? How? There is a Fifty-
Fifty Chance the Economy will Collapse Soon.
With the Banking and Sub-prime Bail out,
Economists Estimate the Real US Public Debt
to be $25 T (not $17.5 Trillions). With Unpaid
Obligations, it Can Reach $80 Trillions by
2040.
Banks Have Written Off Over $2 Trillions as
Unrecoverable Since the Banking Crisis.
The Federal Reserve’s ‘Quantitative Easing’ or
Printing Money has exceeded $4 Trillion So far.
7/20/2014
Please read 'Sovereign Debt Crisis and
Economic Sustainability'

15. The US Government Spending was $3.5 T in
2013 With a Current Deficit of $642 Billions.
As the Economy Stagnates, it Can Reach $1 T
Again Before 2020 (Deficit was $1.1 T in 2012).
31% of all US Gov Spending was Borrowed.
The US Spends 15% of the GDP on Mandatory
Expenditure (Medicare, Social Security, Interest
Payment), a Staggering $1.5 Trillions in 2012.
The US Trade Deficit is also Hovering Around
Half a Trillion Dollar a Year.
7/20/2014
Please read 'Sovereign Debt Crisis and
Economic Sustainability'

16. Slowly Declining Value of Dollar (real worth of $1=
3.5 cents). Other currencies are slowly replacing the
dollar as the currency for international payments and
China has concluded currency(Renimbi) exchange
treaties with several leading economies.
Sudden Collapse in the Value of Dollar-Dominated
Assets Along with the Crashing of Dow Jones index.
Unsustainable Level of US Sovereign Debt leading
to defaulting on Interest Payment.
Depreciating Value of the Corporate Equity Leading
to Defaulting the Debt Payments.
7/20/2014
Please read 'Sovereign Debt Crisis and
Economic Sustainability'

17. Fortunately, the Answer is Big Yes, but How?
There is an Innovative but Unorthodox Way to
Generate Public Revenue without Recourse to
Further Borrowing or Taxing the Already
Burdened Taxpayers.
Consider the Economy as a Virtual Company
and Commoditize the Economic Potentials to
Create National Equity to be Sold in the Share
Market. Make the Taxpayer an Investor.
Even the Foreign Investors would Love to Hold
US Inc. Share Rather than Treasury Bills.
7/20/2014
Please read 'Sovereign Debt Crisis and
Economic Sustainability'

18. 7/20/2014
Please read 'Sovereign Debt Crisis and
Economic Sustainability'