Quote:
An individual that carries debt can continue to carry current debt and increase his current debt as long as his personal income increases enough to carry increased debt.
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That is true, but is dependant on a *lot* of outside factors being stable. Such as peoples willingness to actually lend money. If you base a monetary policy on that. Your fucked. Period.
US industry stopped being powerful enough to support the US standard of living quite a long time ago. But that doesn't matter because 1) The dollar is the worlds currency, 2) The US uses it's military might to achieve economic aims. (The only country now that does. Land of the free. Heh, what a joke).
The difference in the current world is more and more countries are slowly achieving 'untouchable' status. I.E. nukes. and the Euro will be a serious threat to the dollars dominance. The Euro doesn't have to match or beat the dollar for this to happen, just make enough of a dent to spoil the automatic confidence everybody has in the dollar.
That will happen in my lifetime, fairly quickly I think, and the result is going to be interesting. Prolly more military intervention for economic gain such as Iraq, Prolly tightening of trade barriers. All of which just postpone the inevitable. The equalisation of the US economy with the rest of the world.
What is my source for this ? History. More times than you can imagine because the braindead, I.E. theking and his ilk are too stupid to learn from history. Tax cuts now!!! We will rule the world!!! My name is Bush!!! Re-elect me!!!