The Fed and other central banks in developed countries are likely to keep interest rates low in order to ease the financing costs of their public debt, an approach often referred to as financial repression. At least for the near future, our capacity to carry our debt load and our prospects for economic growth matter more than the aggregate size of that debt. Thus the US still has time to make needed reforms.
As for Iran, our resurgent domestic oil and gas production provides the US with greater freedom of action than we have had in decades. In the coming years, China -- yes, China -- seems likely to find itself dependent on Mideast oil to an embarrassing degree. Alternatively, new nuclear energy technologies could redirect the world away from dependence on fossil fuels and to burden the Mideast with having to earn a living.
I’m sure such optimistic musings were in the air prior to World War II breaking out. Who is on the scene in the USA right now with the power to institute reforms before disaster hits? Certainly is not Obama, and he’s got too many people in both parties helping him on his mad course to oblivion.