Tuesday, November 25, 2008

Russian Prediction: The Decline and Breakup of the US.

The thesis is that the US debt situation is unsustainable, therefore we are headed for collapse. In the aftermath, the analyst predicts that China and Russia will take the lead. To some extent, I am in agreement with the analysis. America's love affair with the aborted fetus has finally created an old folks bubble in which the promises made to secure their votes simply cannot be kept . Certainly there is going to be a big bang. Then we have Obama's recent financial adviser picks, which could have been Bush's or Clinton's. They all come from the same school of Ivy League economics / Wall Street investment banking with their brand of government interventionist capitalism, which is what got us into the credit bubble mess in the first place. The CNBC business talk channel is already referring to Obama's presidency as the 3rd term of the Bush presidency. Or maybe it is the 5th term of the Clintons. "Read my lips, no status quo". Even the business channel is afraid to discuss the regulatory burden of American industry which is stifling growth.

What is wrong with the analysis is that it looks at the problems of the US on an absolute scale rather than a relative one. How do we look compared to the rest of the world? The US is simply a lesser example of worldwide problems. Sure we aren't replacing our population, but we do produce more live babies and have plenty of immigration of a more peaceful sort than Europe is getting. Europe, China, Japan and Russia are all doing worse and the demographic bombs will be even greater. Outside of the US, there doesn't seem to be any stigma to killing a fetus.

Russia's moves over the last decade downplayed the need to develop internal markets and bet the farm on oil by stealing the western oil companies investments. A collapse of the oil markets is going to leave this policy in tatters. Similarly for China, the single minded focus on exporting to the US and Europe has been a great success, but has left a lot of internal problems. We have been learning from the news that $2 trillion of foreign reserves isn't going to go very far in the future.

Yes, the US is probably headed for a big fall, but it does seem that we are going to take a lot of others down with us.

3 comments:

Livingsword said...

LOL

Well you have tied abortion and economics together in an interesting way…While I abhor abortion I am not quite sure of the fit. It is interesting how the US has lots of babies and also lots of abortion…In Canada we rely heavily upon immigration…but we have 10% of your population and perform 10% as many abortions…but we do not have as many children per capita…

The US debt and deficit is astoundingly “ginormous”…and it seems that Jedi Oprahbama is planning to see if he can grow the US debt and deficit so much that the number will have no meaning we will al have run out of sand on the sea shore…

Looney said...

Actually, the putting together of abortion and long term demographic bubbles is something done by The Economist. Y'all need to get busy on the kids!

Livingsword said...

Hi Looney…

People often do not want children as it “interferes with their lifestyle”…Chocolate girl and I cannot have children…one of the reasons we seem them as an immense blessing…