HOUSE OF CARDS
More tax cuts and shopping won't solve
problems caused by the nation's twin deficits

From the Houston Chronicle editorial board:

After Greenspan's remarks, the value of the dollar dropped to a new low against a variety of foreign currencies. The drop came not so much because of Greenspan's influence as because of the financial reality that has been obvious for months. The world's banks and speculators are betting against the dollar.

Soon, many economists agree, the low dollar will cause foreign investors to limit their stake in U.S. currency and government securities. Interest rates will rise in order to finance the national debt, growing at more than $400 billion per year. Congress recently had to raise the debt ceiling by $800 billion to allow the Treasury Department to keep borrowing.

Although the U.S. economy is growing faster than expected, rising interest rates would quickly curb expansion and send stock markets lower. Unchecked, the recession could spread around the world.

Click here for the rest.

I've posted about this topic several times, but I was usually linking to non-mainstream news sources. This is the first time I've seen it talked about in the Chronicle. That means it's getting bad.

Quick refresher: the dollar's value essentially comes from the confidence that investors have in our economy. Our continually growing federal budget deficit, our ever growing trade deficit, our extraordinarily low savings rate, and other economic factors have served to greatly lessen that confidence. Right now the dollar is propped up by tradition and reputation only. At some point, possibly very soon, investors are going to wise up and the dollar's value will plunge very quickly. Raising interest rates could slow this drop, but, as the excerpt above points out, this would hit our economy hard. Of course, a quickly plunging dollar would hit our economy hard, too.

Clearly, the US economy is a house of cards waiting for the slightest vibration to knock it down. I'm actually pretty worried about my meager retirement savings that I built up when I was teaching--my money's in a mutual fund IRA right now, and I'm not really sure that it's safe there, but I have no idea what is a safe investment under these circumstances; most of Wall Street is playing like an ostrich with its head in the sand.

This shit really pisses me off. Things don't have to be like this at all, but the goddamned neo-liberals have taken over everybody's imagination: tax the poor; give to the rich; hands off of business, somehow it's all supposed to work out. Democrat, Republican, it's all the same. The whole American power structure loves neo-liberalism because it serves as a handy pseudo-philosophy to justify their own personal fortunes.

Fuck Reagan. Fuck Bush (the first one). Fuck Clinton (a neo-liberal himself--god, the Democrats are such idiots). And of course fuck W.

The bastards are stealing my money.

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