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It's not a threat, it's a fact.

Foreign countries are increasingly worried about the ability of America to manage its economy, which means they're losing confidence in the dollar. Why shouldn't they be concerned? They have their own interests to look after.

This is just the most recent warning. There have been others. Unfortunately no one in Washington (or New York) is listening.

ShnickyShnack wrote:

It's not a threat, it's a fact.

Foreign countries are increasingly worried about the ability of America to manage its economy, which means they're losing confidence in the dollar. Why shouldn't they be concerned? They have their own interests to look after.

This is just the most recent warning. There have been others. Unfortunately no one in Washington (or New York) is listening.

The sad part is, you are correct. The problem is that no other nation on Earth consumes the way the US does, and that is what has been driving the economies of many nations around the world. If the US can't consume, there isn't anyone that can take up the slack.

If you look at it in that respect, you realize that China has been getting something for all the money that have been loaning the US - stability. We are buying so much crap, that it keeps their economic growth positive, and their people happy (enough).

Perhaps, eventually, the Chinese will be able to consume enough internally to keep the growth rate up, but that's still years off. Europe consumes a great deal, but nowhere near enough to keep all of these third world countries afloat. A lot will necessarily fall back when the US economy craters. The current recession is proof enough of that.

In other words, the rest of the world might carefully consider what they are asking for.

Ironically, though; I do think we need to deflate the whole system, and return to something more sustainable. I simply don't see how turning the US into a third world nation overnight is the best way to go about it. If you thought the current recession was bad, wait until the world's buyer has to bow out. And for anyone dumb enough to think this won't happen if the dollar loses its reserve status, ask how other nations with similar debt levels have made out. It could get seriously ugly.

[Tycho?] wrote:

This isn't about "more options becoming available" so much as the US dollar slowly being invalidated. People don't trust it, and nor should they. The economic turmoil the US experiencing has a long way to go yet, and you can bet the dollar is going to be all over the place in that time period.

And we keep printing more of it and spending and spending and spending.

Which is why the teabaggers mock outrage over government spending is laughable at best.

It's laughable because incredible deficit spending has been the norm for thirty years with the notable exception of Bill Clinton's two-terms, yet it only becomes an issue for the Tea Party movement when it's being done by a Democratic president with a domestic agenda instead of Republican pissing it off into some foreign desert.

"Tea Parties" aren't really protesting government spending, because they've had thirty years to be upset. Their argument to that effect is a red herring. Pariah's points illustrate this beautifully.

Last edited by Sternum (2009-09-28 7:44 pm)

Sternum wrote:

It's laughable because incredible deficit spending has been the norm for thirty years with the notable exception of Bill Clinton's two-terms

Bill Clinton was lucky enough to be President during the .com and beginning of the housing boom.

That aside, Obama's spending is significantly higher AND is being done at a time when we cam close to having a banking system meltdown.

It's laughable because conservatives only talk about balancing the budget. In reality they'll vote for anyone who talks "values" and "tough on crime" and "freedom" and so on.

resedit wrote:

Oh - and for the record, debt increased under Clinton as well.
The surplus wasn't because he didn't spend, the surplus was because taxes (largely from tech bubble) collected were more than money going out that year - it had nothing to do with spending scheduled to be paid back in future years.

The dot com crash happened in late 1999, look at this chart:
http://www.boot.com/USbudgetDeficitChart.jpg

Care to modify your mythology?

Pariah wrote:

resedit wrote:

Oh - and for the record, debt increased under Clinton as well.
The surplus wasn't because he didn't spend, the surplus was because taxes (largely from tech bubble) collected were more than money going out that year - it had nothing to do with spending scheduled to be paid back in future years.

The dot com crash happened in late 1999, look at this chart:
http://www.boot.com/USbudgetDeficitChart.jpg

Care to modify your mythology?

Pariah,  calendar year 1999 means 2000 income tax receipts.
If it had happened in 1998, Clintons last year would have been way down just like receipts are way down for Obama (and all the states) now.

Farmerkev wrote:

Pariah wrote:

resedit wrote:

Oh - and for the record, debt increased under Clinton as well.
The surplus wasn't because he didn't spend, the surplus was because taxes (largely from tech bubble) collected were more than money going out that year - it had nothing to do with spending scheduled to be paid back in future years.

The dot com crash happened in late 1999, look at this chart:
http://www.boot.com/USbudgetDeficitChart.jpg

Care to modify your mythology?

Pariah,  calendar year 1999 means 2000 income tax receipts.
If it had happened in 1998, Clintons last year would have been way down just like receipts are way down for Obama (and all the states) now.

So the Clinton surplus was just dumb luck and the deep dip into the red with Bush had nothing to do with his tax cuts......gotcha

Pariah wrote:

Farmerkev wrote:

Pariah wrote:

The dot com crash happened in late 1999, look at this chart:
http://www.boot.com/USbudgetDeficitChart.jpg

Care to modify your mythology?

Pariah,  calendar year 1999 means 2000 income tax receipts.
If it had happened in 1998, Clintons last year would have been way down just like receipts are way down for Obama (and all the states) now.

So the Clinton surplus was just dumb luck and the deep dip into the red with Bush had nothing to do with his tax cuts......gotcha

No, not at all.
Clinton went along with Gingrich and the Rep revolution and we got slightly less growth in spending while we got increased revenue from the tech stock market bubble.
You might recall the many times I've mentioned I think our best government is when we are divided power wise. That's when they reign in each others worst tendencies.
I really don't care which way but if I was god I'd probably pick Dem president and Rep congress.

...and cutting taxes while increasing spending was stupid.