It's the economy, stupid

Call me an idiot if I deeply believe the American economy is not turning a corner any time soon. And call me an ignorant if I also believe that the small-scale depression choking us up is not all driven by the mortgage loan fallout. This is just a microscopic example of a greater problem.

The problem is multifaceted. The US is pumping $3 billion a week into Iraq with less than perfect oversight. The overall US debt is about $9 trillion excluding state-level debt and social programs like Medicare and Social Security which amounts to about $29 trillion. America is an import culture. Look at the computer you type on, the pen you write with, the cell phone you carry. These little things add up; in 2006 they amounted to the $765 billion American trade deficit, writes Economy in Crisis, a conservative blog.

China is our personal banker, and as such has allowed us to withdraw as much credit as we can incur. According to a Forbes article, several countries including Japan and China hold about 44% of the US debt, a powerful leverage against US interests. Just recently, China’s massive recall on several products containing toxic chemicals has put US interests at odds. While we recoil in disgust at the massive outsourcing of our manufacturing jobs to places in Asia, and cry in despair for the Chinese recalls which have killed our pets and sickened our children, we ironically continue our high demands for subsidy-level prices of Chinese imports by continuing to shop at places like Walmart. See the link. But who is at fault? The US government or the US consumer? I say, both.

But enough said, the truth is, the housing market bubble was due to crash eventually, like it has in the past, the problem lies in our overall domestic economic policy: consecutive tax cut laws which have been now renewed for the 3rd time during the Bush Administration, the outsourcing of manufacturing jobs, the failed enforcing of trade agreements, the never-ending US agricultural subsidies, the continuous funding of an open-ended war, the increased military spending and on top of everything a housing market crash. How could we have missed the warning signs of an economic crisis? Simple. If Iraq is our guiding principle, we can’t expect much economic shrewdness from this administration.