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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: RealMuLan who wrote (21093)1/12/2005 1:12:16 AM
From: mishedlo  Read Replies (1) of 116555
 
Going into debt takes hard work

non-Americans should be more appreciative of America's deficits. Do people think it is easy for a 12-trillion-dollar economy to spend beyond its means year after year just to prop up other countries' reputations for stability? It isn't. Going deep into debt when you have that much money to spend takes a lot of hard work.

Start with the American consumer, who consumes everything on earth (helping the United States eat up 25 percent of world oil production) but saves essentially nothing. Thanks to America's gold-plated financial system, its consumers can buy fancy cars with almost no down payment. They can borrow more and more each year against the value of their homes, and spend every cent. They can retire earlier and earlier on their smaller and smaller savings. It takes nerve and energy to live like that.

Of course, the U.S. government does it share, too, and more. When President George W. Bush took office in 2001, he was staring at giant budget surpluses as far as the eye could see. It was hard work engineering a five-trillion-dollar deterioration in America's fiscal position.

Cutting taxes was easy, but hiking spending on virtually every program involves a lot of legislation. Sure, the decision to invade Iraq was a big help in pushing the country's finances off a cliff, but that is far from the whole story. So why is the world so ungrateful?

koreaherald.co.kr
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