Ping!
Our trade imbalance is a danger to our country’s long-term prosperity and has global implications beyond economics. It is certain if we continue on this path there will be a worldwide meltdown. There has been no desire from any political party to reign in the manic spending of the American people. Somehow they thought that for a decade of trading paper back to one another, flipping houses, and taking money out of homes to add upgrades was the idea of a healthy economy. What we ended up doing is simply rearranging the deck chairs on the Titanic while the world built up stronger production capacity and has siphoned off a competitive advantage in many areas. Spending more than you make impacts the world more than you think. It is time to get serious about this and make it a national priority to get our books in order. Former Federal Reserve Chairman Paul Volcker knew this and jacked up the Fed Funds Rate into the double-digits to reign in inflation. People did not like this but in the end it made us more productive in the 80s and 90s. Who will be the next person to reign in spending before this bubble breaks the world?
People always scream about the Great Depression ... anybody remember OCT 87? That crash was supposed to bring on a Great Depression too, but it didn’t happen. We’re having a bit of a correction - not a depression.