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  • by pudge (1) on 2008.03.20 12:04 (#61731) Homepage Journal
    There are a lot of problems, but none of them are new, and we've gotten through just as bad. Yes, I am not worried.

    The fall of the U.S. dollar is not bad. It just is. I called that, hell, last decade maybe? And it's happened about when I thought it would.

    And we were actually running a government deficit before and during the dot-com years. The budget was very briefly in surplus during the best of those years, but our unfunded liabilities, especially medicare and social security and debt interest, continued to grow larger than that surplus.

    The drop of the dollar is GOOD in many ways because it means we will import less and export more. I want it to stay low. The people this hurts the most are certain investors (who have only themselves to blame for any losses) and Americans who travel abroad (sucks to be them), as well as, of course, importers. But importers and exporters can't both be happy for very long, and I'd prefer the exporters be happy.

    Yes, there is lag involved, always. Yes, it will be painful in between. That is normal and expected, and we've gone through it before.

    As to energy, shrug, this just means we'll do more nuclear (it's about damned time) and local resources.

    Again, lag and pain. Yep. Every country goes through this. I'd still rather be us than almost any country in Europe, which suffers from lower GDP per capita and higher unemployment and higher energy prices.

    And with a triple-deficit in play, some of the other safety values are missing as well. Governments, already cash-strapped, can't simply spend big to help the country past the problem.
    Thank fucking goodness. This is a nice short-term solution, but helps CAUSE the problems that precipitate more economic woes down the road. I'd rather the government simply hand out the money than spend it on new expenditures, which end up bloating the budget, which never comes down again.

    As you can see at that first link, we now have the clearest evidence yet that the US economy is in bad enough shape to kick off stagflation, and that it's probably happening right now.
    Well, we'll see. The one thing left you didn't give much mention to was unemployment, and while there are definite signs of increased unemployment (a couple months in a row of negative job growth, IIRC), we have yet to know whether this is a short-term correction or a longer trend like we saw in the 70s. As long as unemployment stays relatively low, that is the main thing.

    I am not optimistic about it, but not pessimistic either. If it happens, it happens. My greatest hope is that government can SLASH spending, ease the tax burden, ease regulations, let us grow out of it in a HEALTHY way.