China

I completely disagree with your notion that U.S. is less interdependent than China. The exchange is clear: U.S. needs cheap Chinese manufacturing to proliferate its innovation, and in turn, China gets direct access to U.S. blueprints, and is able to leverage and improve upon them to produce their own products. This is basic economics, not a question of "who is genuinely innovating". American companies need cheap manufacturing as much as the Chinese needs technological know-how. Why? Because if no one buys "innovative" products (because of how much cheaper they get) then we wouldn't get that innovation in the first place.

I don't understand economics enough to address the point on debt, but I have to comment on that:

> American culture of honesty; fraud and cheating are national scandals, not the norm

Wait what. Fraud and cheating are sometimes national scandals if media bothers. But there's absolutely no honesty. Corporations lie and steal. Journalists lie. Startups... well, things like astroturfing, lying to users, tricking them into doing things that are harmful to them, "growth hacking", etc. are not only tolerated but encouraged.

Call it selection bias, but I don't see much of this "culture of honesty" anywhere in the western world, and especially not in the United States.

>The secret to this is not genetics or something in our drinking water. We’ve had an environment that encourages investment, welcomes immigrants, rewards risk-taking, hard work [2], and radical thinking, and minimizes impediments to doing new things. Unfortunately we’ve moved somewhat away from this. Our best hope, by far, is to find a way to return to it quickly. Although the changes required to become more competitive will likely be painful, and probably even produce a short-term economic headwind, they are critical to do.

On a high level I agree with this. The question is what's happened to cause growth to slow? The answer to this provides a prescription for what to do, but it's also a highly contentious and political question.

Here's a few suggestions, which will appeal to people of various political views. They're all true and all false to some degree.

1) Regulation has crept in to stifle innovation. It costs billions to test a new drug, so only a few firms can do it, and those firms will try to be really careful before spending any money. There's loads of rules no matter what sector of the economy you look at. Tax is a whole can of worms inside of this rubric. We want to have public services, but we also want people to have incentive to work.

2) Near-monopolies have taken over the economy. (You can tie this to regulation, of course.) You can work for one, or buy services from one, but they're so powerful few people would want to compete. As technology still inches ahead, a new one is up for grabs now and again (Operating System, Search, Social Network...) but this isn't all that great either. What happens to all those entrepreneurs and employees who aren't working for the next big ticket? What if the economy had real competition, with lots of little companies providing similar services?

3) Capital can move to where it makes the highest return. Labor can't. I wouldn't mind moving to the US, where I have lots of family, and there's work in both the fields I'm interested in (finance and startups). But I can't get a visa, apparently (been told not to bother). Plenty of people currently in the US can't really leave, even if their industries are leaving.

4) Perhaps China is just doing a Solow. They're behind, so their growth rate is higher. When they get closer (per capita) perhaps they will hit a wall like Japan. Not long ago everyone was lauding the Japanese model, now we think lifetime employment in large corporations is part of the problem. The danger of this explanation is it doesn't really spur on a lot of introspection.

Anyway, that's a bit disorganised, apologies for that. But those are just some things to think about in the debate.

There's so much biased and simplistic thinking here that it's hard to respond without writing a whole essay. But the note about China being more individualistic is just laughable considering the Communist Party's forceful manipulation of their economy. In fact, it is the US's strong individualism religion that will prevent any coordinated response to our decline, such as increased public spending on R&D.

It's not an exact comparison...

For instance - if I bought a house in the 1990s for 200K and it's now worth a million dollars, it isn't stealing $800K from anywhere. That's new wealth that I have that I can also put to work. (Even if I don't take a mortgage out on the house, I can invest more of my other money more aggressively, if I'm paying less mortgage, or know that I have a high value asset in my home)

I think it's more appropriate to look at the monthly rent differential.

Let's say that a 1BR in Palo Alto costs $2,500, and a similar one in Austin costs $1,000. [0] In that case, there is a $1,500 * 12 = $18,000 differential. Let's double it to include how much you have to make to have that much take-home income, and you have a $36,000 per year difference. If an angel-fed startup has 3 employees, then there is a ~100K per year of effective real estate tax. (Approximately 20-25% rather than 100%[1])

The trade-off is, how much more likely are you to succeed and scale based on being in SF vs Austin?

[0] I'm basing both #s on the very accurate "Approximate the first Google result" method.

[1] One can argue that everything is more expensive in the bay area, but total cost of living comparisons are tough to do. Is it % of spending or absolute dollars? Does it depend on public schools? Quality of goods?