Posted on 11/24/2004 1:40:40 AM PST by Coryoth
new member posts ideas that belong on DU. go figure. RATS think interns are play things and the balanced budget was their idea. Send this guy home.
I do agree that it will take a significant chain of events, and that disaster is actually unlikely - that doesn't mean we shouldn't at least be concerned with these issues.
As to synchronicity - it need not be a day, it can be a month, or six. And yes, the market is a mass of independent minds all moving in millions of different directions, but it does also have a herd mentality and is prone to occasional panic: Consider the collapse of the Asian tiger economies in late 1997, or the abysmal state Argentina found itself in.
Yes, the US is not Indonesia, nor Argentina, and certainly more significant factors would be required to actually get the herd to move. Once moving however, those examples show that investment can and will depart en masse in a matter of months, and currency depreciation can and will occur with dramatic speed should panic spread through the market.
As to your contention that the current state of affairs is not worthy of concern - I would point you to this speech by Alan Greenspan. He is typically cautious and measured (to be expected given how much the markets hang on his every word), but he quite clearly outlines that there is cause to be concerned with regard to the US current account deficit, and the US Dollar. I would think that if Alan Greenspan is ready to remark on cause for cautious concern, that one can reasonably say that we shouldn't dismiss the possibilities.
Hold that thought.
That and inflation are self correcting mechanisms.
In the event of a collapse however, the importation of immigrant labor would become a major issue. Protectionism would be vindicated to a degree. Free Trade could use some fine tuning possibly.
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Perception drives reality. Think positive.
Basically we will get through the debt/dollar problem with a combination of depreciation/inflation and economic growth. I agree it's tricky mainly because much of the flow of credit comes from sources that aren't under anyone's control like home equity. But world economic growth (thanks to years of our pushing trade liberalization) will help us also.
Thanks for the ping.
The most serious problem I see was not mentioned in the article.
The ever increasing percent of total expenses in the U.S. budget on social welfare is the greatest danger to our national security.
In other words, the greatest threat to our survival are Republicans who are ruling like Marxists when it comes to social welfare spending. The biggest surges in social welfare spending are yet to come as the baby boomers retire and the illegal aliens here start breeding baby illegal aliens (who would then be citizens).
When Bill Clinton first entered office in 1993, we spent roughly 57 cents of every dollar of total spending on social welfare. Today, it is pushing 70 cents of every dollar.
As the percent spent on social welfare increases, the only place it can be gouged from is Defense spending, as it is the only other category with sufficient dollars to do that.
Don't let dollars fool you. In percent, we are spending LESS on Defense today than in 1993. As the world gets gravely dangerous with nuclear proliferation et al, we are spending less on Defense than we were in 1993 because of the superhot growth of spending on social welfare.
I agree with the points the author made. However, the two most serious threats to our survival as a nation (as we know it) are:
1] Republicans acting like radical liberals when it comes to spending
2] Lawmakers focusing on social welfare--both domestically AND globally--at the expense of our own national security.
Very good essay.
Expect to get slammed by the Ostrich League and the Rose Colored Glasses Society as a "doom and gloomer."
Dear Coryoth, I know you are not a Democrat. This is really not a democrat/republican issue. You stated this case eloquently and with measured temperment. Sorry you are being criticized for simply trying to educate us. YOu said it better than I could, but you said what I have been trying to say. The one thing you mentioned which I did mention is the probability that America will likely come out of this intact. I agree. I do worry that there will be substantial mysery inflicted upon the unsuspecting and the unprepared. You and I cannot fix this problem. But we can prevent ourselves from falling victim to it, and ring the warning bell for those who will hear. Thank you for your astute analysis and concern. I will study this article.
We agree they are self correcting, but at what price. Much mysery, loss of jobs, loss of real income and purchacing power, and more.
How many elephants can you fit into a living room? All I know is that you can fit 5 of them into a VW bug: two in front, two in back, and one in the glove box.
And welcome to FR!
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