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In 2005 the public debt was 64.7% of GDP According to the CIA's World Factbook. Not that oneroius if the irresponsible tax cuts to the rich are actually reversed. Japans are 120% of GDP.

Might the US not actually increase government and fiscal deficit to cope with any large downturn?

Nice analysis. True!

Let us note that Citibank which is one of the largest banks in the world is planning to sell fixed assets to raise its capital as the primary capital of the bank is hammered by bad loans. This is probably a fire that is catching on amongst all American banks as there are more delayed repayment of consumer loans.

This is indeed the big, hidden and potentially explosive issue in USA.

And another important matter is that government debt is increasing at a rate of 1 trillion Dollars every 15 months, or $2.2 billion a day! That means every man, woman and child in USA ends the day with about $7.5 more debt than the same morning!

The solution: make the hamster run on the wheel a bit faster!!

You forget the traditional way to avoid reality and that is to do the war thing! America politicians seem more than willing to support this adventure and of course our Generals like all Generals are more than happy to play with their toys and determine who has the biggest weenie! Our citizens are paralyzed by fear, impotence, and religious ignorance; it will be interesting to see what will happen as the citizen at large has to "sacrifice" for the nation, read the political class!

Well said. Thank you.
There are too many assumptions of always good news built in this market system in USA and the system is fully leveraged.

It is time to get sober with finances.

Let them eat Freedom Fries!

Realistic observations. And as one poster mentioned, we need to factor in the cost of adjusting to a different life style due to global warming.

You can also say "it is the leadership, stupid". Will this be the new election one-liner?

When I read this article of Dr. Ettefagh together with his last one (about Iran and WWIII), I am now in full agreement with him that the Bush government has overblown the Iran issue and has brought Iran out as the whipping boy to avoid the main issue.

In every country, the economy is the main political matter, not foreign policy. As Clinton said some 16 years ago, it is the economy stupid!

America must get out of this web of problems and get back to the world stature for which is famous.

18. Nicholas Tesla was a Russian in New York. Russians today are privileged to have payments or freedom of usage for electricity and electromagnetic means, without any measure and restriction.

19. in New York are Druids and Celts.

20. World Wars were right after the electricity was widespread that charged the land and people.

21. ozone layer has weakenings where radioactivity experiments take place. radioactivity breaks the magnetic energy. ozone layer weakenings date back to first radioactive experiments at the laboratory.

22. with radioactivity, spirituality collapsed also because of breaks in the medium of inspiration and communing.

23. inspirituality is spirituality which is based on inspiration, originally. it is different than unspirituality, highly confused.

24. magnetic alliance is available by wisdom of humanity on earth.

25. trees and minerals provide with magnetic energy and peace.

26. carbondioxide is the food of trees. in the dictionary of global artificial intelligence, carbondioxide is an item as the food of humanity, for oxygen.

27. within the words of Bible, trees are a referral to humans. Oxy is an old reference to Mary, Divine Grace, as is on Earth also.

28. with less electromagnetic means and radioactive applications, afforestration shall be the solution for inspiritual awakening of inhabitants, for a globe shining and cool.

29. the water on earth is not taken day by day from outer space. so we are drinking the water that dinosours and mammouths had drinken also.

28. the melt of ice is a fresh source of water to the oceans. the young white polar bear in Germany is a solution to the white polar bears. they shall live.

29. the Bears in Asia and USA shall be the Source of Spirituality and Wisdom in the Forests of the Countries. (masters of natural life and inspiration in the folk)

30. the millions of grosstonnage steel ships on the seas for the 90% of good freight on world trade increased the sea level.

31. the other side of this sentence is the awakening in inspirituality. grace and oxygen with trees must be provided.

32. Darwin on Turtle is readable in mastery and awe, as a reference of wisdom of NAture, with St Francis.

33. thanks for reading.

A good analysis.
Let's also factor in the needed investment (demand for cash) to turn around an energy hungry system to a more environmentally friendly one-- it is a must, given global warming!

For now, I am going shopping at Wal-Mart! The Chinese need my cash.....

ettefagh = ittifak
ittifak = alliance, union, agreement
ali = almighty, august, lordly, grand
mark = light, shining

to Ali Ittifak
Almighty Alliance

1. the other side of the moon is alight also. it is not dark. the face of the moon is fixed to earth but the other side of the moon is with the sun also.

2. "to turn the other side of the face" in the Bible is to have the du-alit-y. to have both sides shining, we shall have the other side alit.

3. Green Belt, Communism, Teslim and Israel are for peace, provided Muhammed and Jesus are successors and Moses Russia UK and Israel are druid.

4. Wife of Muhammed and Her Son of Uncle "Varaka bin Nevfel" who educated Muhammed were Christian.

5. the family that Muhammed made war against later was the governor that reached to Spain Africa India, was the governor that commenced the Crusaders and tortured Son of Uncle of Muhammed Ali and His Grandsons.

6. St Francis of Assisi is known with Economy and Peace. while there is an item in USA about economy, we can talk about nature, animals, peace and internet.

7. internet was founded at a university and developed by CISCO company in St Francisco city. Internet was for economy and peace.

8. KArl MArks is readable provided there is du-alit-y. with duality, this system does not function properly in full. in duality, it falls after a few steps. with du-alit-y, it is an applicable reference system.

9. referring to Leaning on OAK Tree of Druids, Leninist MArksist system with du-alit-y, is completely natural shining communing way of people.

10. miracles happen within du-alit-y. each part is an individual. with du-alit-y, they are together. in duality, they are used to break each other. within du-alit-y they are complete, and they may have interfaces and unity. in duality, they dont have an allşiance but frictional.

11. global warming is because of duality. thesis-antithesis-synthesis of duality is glowing within duality. but in du-alit-y, globe is shining in peace. parts of duality are not substitutes. they are individuals in du-alit-y.

12. poverty is from po-verty, it means "royal pot", referring to body and shining human.

13. the main problem of economy today is electromagnetics and vehicles invented based on electricity and electromagnetics, mobile phones televisions etc.

14. Tesla's experiments for verbalizing divinity, was granted free of usage for all to meet divinity with a language produced by, and accompanying electromagnetics.

15. because it is patentless and free of usage, the language on it must be attached also. this shall ease the peace and economy, with divinity and august grand almighty alliance all over the world.

16. this is global peace and wealth, with all inhabitants being on the ship and divine bridge.

17. the globe itself is weightless as the astronauts are weightless in the space journeys. but there is an alliance of planets also.

18. thanks for reading.

Mr. Ettefacgh

Now you write on a subject about which you seem to know something as contrasted with your ramblings about US foreign policy and your obsession with Israel.

I think you are largely correct, if entirely unoriginal, about the problems facing the US economy.

You write: "The devaluation of the dollar is not a passing market correction; it’s a non-confidence vote from global markets on the American economy." Well, it may be more of a deliberate US attempt to have a weak dollar policy while proclaiming the opposite.

Oil is still traded in dollars albeit, the price is 40% higher for us in the US than for Europeans since the Euro has appreciated that much.

What most people including you seem to miss in all this is the tremendous resiliency of the US economy. It is still probably true that if America sneezes the rest of the world gets a cold. It is all well and good to talk about the massive demand for commodities and the growth of the Chinese, Indian and Middle Eastern economies, not to mention the BRIC references.

But, if the US economy goes into serious recession and we stop importing stuff from China because there is less discretionary income, the consequences for the world economy won't be that great.

Some day soon, this country will stop spending so much of its resources on wars and military intervention. That day is not too far away. When we do, competition with China and India will propel all to prosperity.

Your gloating Schadenfreude notwithstanding, I'm much more optimistic about this country's future than Iran's. In the past 30 years Iran has regressed but now has a chance to do something with new found wealth. My bet is that your leadership is every bit as inept as it appears and the opportunity will be lost.

Ali Ettefagh - You pretty much nailed it. I think you are too optimistic about Amercia;'s future, however. Take a look at who runs things over here. The Fed will lower interest rates and the government will bail out the speculators/investors. Polician's and corporations will all sing a song of how this is a temporary downturn, part of the normal business cycle, and American's will live in denial until things really start to hurt. By then, of course, the damage will be so profound to our infrastructure that it will take at least ten years to work our way out of the mess and the chances to our culture in that recovery will NOT be pleasant or for the betterment of the world.

Unfortunately for the USA citizen Ali Ettefagh has analysed the situation correctly.

There are two clouds that were omited from this analysis, first the unknown effect of FINANCIAL DERIVATIVES' unwinding [a total over 29 trillion dollars] and the effect of Global warming, to soon affect all aspect of daily life in the heaviest consumption nation on earth.

The political class and their symbolytes, MSM, do not wish to dwell into any of the above problems, well illustrated by various aqbusing comments pointed at Mr. Obama, for even bringing up the subject that Social Security/Medicare issue has to be reanalyzed, in light of the future deamnds on the growth of these entitlements [in 30 years they will take 20% of GDP]

Unfortunately the price has to be paid for the past 30 years of deficits, wars and shop til you drop lifestyes

Nice article.

Add to this the fact that the U.S. is losing its technological "edge" and we can expect to see a much more humble, perhaps even isolationist, America for decades to come.

The rest of the world will become stable and prosper.

Hopefully the U.S. will agree to play second fiddle and won't threaten to "go out with a bang." Because it might not take much for the pieces to fall into place for us to see a repeat of W.W. II. (some of these neocons have said things dumber than what Hitler said when he proclaimed that invading Russia would be a cake through).

Colleen

http://winthrop77.blogspot.com

"Has any of this gone unnoticed by the rest of the world? No. But Americans carefully and intentionally avoid these fundamental issues as topics of conversation."

Why? Because it is commonly considered not only unpatriotic but anti-American to do so.

Now let us read how many, and who, will confirm that in the following comments.