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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: American Spirit who wrote (43090)	4/19/2004 1:29:05 AM
From: stockman_scott	Read Replies (1) \| Respond to of 89467

a prison cell for Oil Slick Dick Cheney and Ken Lay sounds about right to me.

To: American Spirit who wrote (43090)	4/19/2004 1:30:17 AM
From: Skywatcher	Read Replies (1) \| Respond to of 89467

some more sobering commentary on our Bush Economic Debacle But those same energy prices will add to the US consumer’s financial burden. Modern American suburban life requires several cars per family and long commutes to work for many. Every dollar that goes on the credit card for gasoline is a dollar that doesn’t go into retail spending or paying off debt. The consumer- and debt-driven US economy still looks shaky to me, despite the promising macro growth numbers. A recent commentary sums it up: “The US has been steadily transferring its economic wealth and the power that goes with it to other nations, directly as a result of its enormous debt. The US is frighteningly dependent upon foreign cash inflows to finance its huge deficit. This increasingly places the very solvency of the US economy in foreign hands. The US currently runs an account deficit of 5 percent of its GDP, a record high, which cannot be maintained indefinitely. Crude-oil imports account for a sizable portion of this current account deficit, and become increasingly significant as the global price of oil elevates. An orderly decline of the dollar by about 40 percent, far greater than the overall 8 percent (about 20 percent against the euro) seen so far, would be required to help shrink the dangerous current account deficit. However, such a decline presents a range of other problems that are considerable in their impact and risk. ”In fact, the only reason the decline of the dollar has not been disorderly (or even catastrophic) already is the fact that the Asian economies, most notably Japan and China, have so far continued to purchase enormous amounts of US debt in an effort to keep their own currencies from escalating out of control against the dollar. Notably, private investors who formerly purchased US debt have mostly abandoned that practice out of fear of holding too many dollars, and that slack has, so far, been taken up by the Asian central banks. The entire situation for the US economy is very unstable and filled with risk. The fact is that there currently exist so many imbalances, many firmly centered in the US economy, but extending outward to affect the global economy, that no one can say with any authority precisely what all the risks are, or what the future holds, with much accuracy. However, one thing that is certain is that because there exist so many deep structural weaknesses and very considerable risks, the US economy no longer commands the global respect and confidence it once did.”