Friday, October 29, 2004
It's the End of the World As We Know It
Maxspeak has a link to a New York Times Article describing the dangers presented by our current foreign trade imbalance. Some predict a sudden collapse, others say a slow decline, but the US standard of living must fall sooner or later.
As China is one of our larger creditors, let me strap on my tinfoil hat and predict a sudden collapse within the next four years, especially if Bush gets another four years as President. Why China and why Bush? One word: Taiwan.
Our economy is now based primarily on purchasing consumer goods manufactured overseas. We've been running a massive foreign deficit for many years now. The only thing keeping the US economy afloat are creditor nations purchasing US Treasury bills and other securities so we can continue buying their products.
Rather than pay down this debt, we're spending still more money on Bush's Iraq adventure. We're already 200 billion into Iraq, and counting. The rest of the world is in no shape or mood to help pay for this in addition to funding our trade deficit, especially if Bush remains President.
Why 200 billion to attack Iraq when Saddam's army was just a fraction of its former strength? Tomahawk cruise missles and smart bombs aren't cheap, but we've been using them up faster than a Hummer burns gasoline. Some of those gold-plated weapons systems use imported parts, too.
Enter China, which has fixed its own currency to the dollar at an artificially low level. This makes our consumer-spending-based economy dependent upon China's exports and loans. Any sudden changes in China's financial policies would have a catastrophic effect on the US economy.
Meanwhile, Iran is acquiring the capacity to build atomic bombs. Bush and the neocons cannot let them succeed, as this would give Iran complete control over the Persian Gulf. (No US aircraft carrier task force could survive long against nuclear missiles.)
Against this depressing backdrop, imagine the following scenario: Bush launches an attack against Iranian nuclear facilities. Iran counter-attacks and uses its anti-shipping missiles to close the Persian Gulf to oil tankers. World opinion is virtually unanimous against the US. Venezuela's Chavez and the Arab states declare an oil embargo against the US.
China seizes the opportunity, joins the embargo, and dumps all its US securities on the market. The dollar crashes and the US economy is crippled. Over-extended US forces lack enough fuel to esupply even if US factories could continue manufacturing munitions with no fuel for transport.
With the US paralyzed by this "perfect storm," China presents Taiwan with an ultimatum: surrender autonomy through negotiation or be invaded. Without the US Navy to back them up, Taiwan surrenders. The US is humiliated again.
Stripped of its superpower aura of invincibility, the US is forced from all its foreign bases by renewed nationalism. America's "Empire" ends within 8 years of its birth.
* * * * *
Update:
Click here for an optimist's view on this subject:
As China is one of our larger creditors, let me strap on my tinfoil hat and predict a sudden collapse within the next four years, especially if Bush gets another four years as President. Why China and why Bush? One word: Taiwan.
Our economy is now based primarily on purchasing consumer goods manufactured overseas. We've been running a massive foreign deficit for many years now. The only thing keeping the US economy afloat are creditor nations purchasing US Treasury bills and other securities so we can continue buying their products.
Rather than pay down this debt, we're spending still more money on Bush's Iraq adventure. We're already 200 billion into Iraq, and counting. The rest of the world is in no shape or mood to help pay for this in addition to funding our trade deficit, especially if Bush remains President.
Why 200 billion to attack Iraq when Saddam's army was just a fraction of its former strength? Tomahawk cruise missles and smart bombs aren't cheap, but we've been using them up faster than a Hummer burns gasoline. Some of those gold-plated weapons systems use imported parts, too.
Enter China, which has fixed its own currency to the dollar at an artificially low level. This makes our consumer-spending-based economy dependent upon China's exports and loans. Any sudden changes in China's financial policies would have a catastrophic effect on the US economy.
Meanwhile, Iran is acquiring the capacity to build atomic bombs. Bush and the neocons cannot let them succeed, as this would give Iran complete control over the Persian Gulf. (No US aircraft carrier task force could survive long against nuclear missiles.)
Against this depressing backdrop, imagine the following scenario: Bush launches an attack against Iranian nuclear facilities. Iran counter-attacks and uses its anti-shipping missiles to close the Persian Gulf to oil tankers. World opinion is virtually unanimous against the US. Venezuela's Chavez and the Arab states declare an oil embargo against the US.
China seizes the opportunity, joins the embargo, and dumps all its US securities on the market. The dollar crashes and the US economy is crippled. Over-extended US forces lack enough fuel to esupply even if US factories could continue manufacturing munitions with no fuel for transport.
With the US paralyzed by this "perfect storm," China presents Taiwan with an ultimatum: surrender autonomy through negotiation or be invaded. Without the US Navy to back them up, Taiwan surrenders. The US is humiliated again.
Stripped of its superpower aura of invincibility, the US is forced from all its foreign bases by renewed nationalism. America's "Empire" ends within 8 years of its birth.
* * * * *
Update:
Click here for an optimist's view on this subject:
If the majority of people in this county can’t tell friend from foe or don’t care enough to act on the difference, well, then the election will come, and let us hope they enjoy what comes after it.
