America is merely wounded, Europe risks death

The Telegraph ^ | 8/1/2011 | Ambrose Evans-Pritchard

[BooBoo1000]

I don't care what comes out of the Blowvation Machine, you cannot, repeat, cannot spend your way out of financial ruin. It is just like if you and I have maxed out all of our Credit Cards, then we get an application for a new Credit Card in the mail, we sign us and start to max it out paying our old Credit Cards. The only way we can survive is to declare Bankruptcy as a nation and start over. Which would be great, we would not owe anyone anything, and our new currency would be one of the strongest in the world.

[familyop]

"Perhaps a gradual weaning from socialist controls in U.S.A. is better than a politically initiated crash?"

Yes, a fast return to smaller government would temporarily, virtually shut down the economy. But there might be an extra problem with a slower transition.

The manufacturing businesses that we hear about from the sponsored media are large ones--most often global ones. The ones that we don't hear about in this context are small manufacturing businesses and attempts to start them. One kind of manufacturing business is extorted by big government but also pays big government at all levels for gatekeeping tasks against small manufacturing businesses.

IMO, the default process will be far more uncomfortable and long than expected by the proud, if it is done very gradually. Remember what happened in Eastern Europe, and notice the parallels. There's more to an economy than management and finance, and there are more perspectives in an economy than those of the political politics class.

Families most likely to invent and innovate are attacked in several ways from all groups above them. Socialist controls that keep them from producing will be the last to be forced to relinquish their anti-productive activities.

See the result of such global-oriented policies in Argentina. Foreign business representatives unwilling to change their attitudes are taking a whipping. Backlashes can be harsh and enduring. And yes, Argentina has been quite socialist for a long time, but have a look at who continued to enjoy the tool of socialism there, long after the unions were busted by the exodus: those members of the exodus, of course.

[familyop]

One more point: government spending in the USA is probably about to go up, and enforcement efforts of regulations (controls) are being increased in attempts to steal more revenues. Result: more people angry at the enforcers and their bosses.

[bruinbirdman]

Socialist leadership and their unwitting dupes are so ingrained in American society that the big crash and rebuild on Conservative principles is about the only hope, ie. slow go gets you GW and RHINOS?

yitbos

[familyop]

Well, apparently. There’s word that the dirty deal was signed. The last that I saw, was talk about raising it by $2.4 trillion with a lie about cuts in spending (decrease over 10 years in proposed spending hikes). Economic changes might happen more quickly, at times (volatilities) from here, on.

BTW, did you see the western stock markets today? Some commodities and currencies haven’t moved quite as much, but they may do so in unexpected ways during the second half.

[familyop]

There also may be a tax increase across the board. It’s pouring rain here now, so I’ll look around for more solid information on that.