Wednesday, January 28, 2009
Cleaning up after the US
The World Won't Buy
Unlimited US Debt
Peter Schiff, The Wall Street Journal: Barack Obama has spoken often of sacrifice... What he might have said was that the nations funding the majority of America's public debt -- most notably the Chinese, Japanese and the Saudis -- need to be prepared to sacrifice. They have to fund America's annual trillion-dollar deficits for the foreseeable future. These creditor nations, who already own trillions of dollars of US government debt, are the only entities capable of underwriting the spending that Mr. Obama envisions and that US citizens demand...
It is also clear from the political chatter that the policies most favored will be those that encourage rapid consumer spending, not lasting or sustainable economic change. So when the effects of this stimulus dissipate, the same unbalanced economy will remain -- only now with a far higher debt load... If any other country were to face these conditions, unpalatable measures such as severe government austerity or currency devaluation would be the only options... Just like all other bubbles in world history, the US debt bubble will end badly.
William Pfaff, Truthdig: NATO is not real; one might think it the more important organization, since it (or parts of it) makes war, but its independent existence is virtual; it is an adjunct of the United States, and serves no other purpose... NATO has no coherent overall purpose and has not had one since the end of the Cold War. The neoconservatives wanted it to replace the UN, but no one else did. Any number of redefinitions and reorganizations have been proposed or tried and have proved unsatisfactory because no one can explain what it is that NATO really does or is for, other than to clean up behind the United States.
Image source here.