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Politics : High Tolerance Plasticity

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To: Sun Tzu who wrote (23138)	10/28/2005 9:43:36 PM
From: schrodingers_cat	Read Replies (1) of 23153

Certainly, the current US leadership is spending irresponsibly and very wastefully. While the war is consuming a lot of cash, much of the defense budget is being spent on projects which are irrelevant to the war in Iraq and many projects are failing. There is also a lot of debt in the private sector, but I think this has more to do with low interest rates rather than any structural problem. We must not forget that currency values are relative. Sure the US has troubles, but how do our troubles compare to the mess in Europe and Japan? Japan fell into recession 15 years ago and has never really recovered. France and Germany suffer from a failed socialist system which seems unable to reform itself, together with a badly thought out single currency. Compared to Europe and Japan, the US economy is much better run, even under the Republicans. The common problem in both the EU and Japan is that government meddles too much in things that ought to be left to the private sector. Government rules and regulations produce economic stagnation. There are problems elsewhere too. Russia has lots of potential but look at what happened to Yukos. India has a long history of socialism although there is no longer so much that it strangles all private enterprise. China probably has lots of good investment opportunities but the currency isn't convertible and the government manipulates the exchange rate. I think the dollar's strength is a lot easier to understand when you look at the many problems elsewhere in the world. Because we have fewer government rules and regulations than most other countries, business can invest here and make money. The strong dollar is a big cause of the US trade deficit. When it eventually adjusts downwards, I think the US economy is flexible enough to step up production of items which used to be imported.

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