I flunked econ in college. So why, you ask, do I keep bringing up the subject. Dunno. Just this last blast, okay?
We Americans are living beyond our means, borrowing like crazy, refinancing our houses, buying cars on long-term leases and eight-year finance packages, because of the low interest rates and because, well, we're spoiled. While that's happening, Bush is spending like crazy and cutting taxes, so we're incurring huge fiscal deficits and, as we have for years, gigantic trade deficits. So where is the US getting money from to handle this shortfall, these 500 billions this year, and more the next?
The same place we overspending individuals are: borrowing. And from whom? China and Japan.
So all China, Japan and Russia have to do is to decide that in one week they should switch to the Euro, and the Far East should call in some of its trillions in loans, and we're ruined.
It's the Cold War all over again, except they're the ones with the usable weapons of mass destruction.