Quote:
Originally Posted by adultchica
That is not good news at all. Maybe a new prez in 2008 will help?
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No doubt there will be ripples when there are changes in the political areana - but seriously doubt real progress will be made over the term of one.. or two.. or three presidencies.
One man or any political party can only encourage/discourage activity with an object of improving the economy. Tho sure, there has been a lack of fiscal policy and this has simply increased the economic damage.
The US is (least late 2004 - and prob even worse now) technically insolvent with a balance sheet deficit of $7.7 trillion plus around $45 trillion in commitments to social programs - bottom line, something in the region of $50-60 trillion in debt. That is one serious challenge for any nation and obviously requires more than "words" from the Federal Reserve.
Other factors, which are not new - is the constant draining with trade deficits. There has never been a trade surplus since 1968. It's obvious there is some serious need for investment in US manufacturing industries which can produce whatever for competitive exporting to other nations. There is something ironic about the only two items which do produce a trade surplus - wheat and arms. Farmers are doing than their share from the land - pity there is little actual industry can do to match that apart from arms trading. Arms trading is not the most wonderful industry to have a reputation for - the US exports more weapons worldwide than all other nations combined.
Only my
- suspect a damage limitation excercise will take a decade or so before seeing any positive effects/benefits. Meanwhile large volumes of dollars are in the hands of other governments (eg China) and any policy they choose to elect in dumping lower-value dollars is not going to help the current valuation.
Been watching this carpet roll out for a few years now - and it's going almost the way I thought (tho seems to take longer to happen). It's almost the same as running a corp - you can't have revenues of one million and spend five million on an ongoing annual basis without thrusting that corp into the dirt. Suspect there will be a need, whether any president has the desire or not, to implement more stringent fiscal regimes to curb further damage. They seem reluclant to to this - prob for obvious reasons, but reality has to kick in at some point and a cessation of living off foreign loans.