As the dollar drops, so goes the US credit rating.
I slogged through my email’s this morning..my mind on other things..when I hit on one from Newsweek that caught my attention. The title: ‘In the Realm of the Dying Dollar’ was enough for me to sit still and read it through. I have heard lately that europeans and canadians are flocking to our shores to shop their little brains out because our dollar is worth less than the Euro and Canadian currency. I realize the devaluation of the dollar isn’t a good thing but noticed I haven’t read too much on that topic lately.
So, I read the Newsweek writeup and its not pretty. It tells us that the Decider-in-Chief is ruining our lives in another way that isn’t quite as obvious yet. The Newsweek article mentions another writeup in Vanity Fair by a Nobel laureate that rips BushCo a new one:
In a blistering essay in the current Vanity Fair, Nobel laureate Joseph Stiglitz, a former World Bank economist, notes that Bush took a nation with a budget surplus upon assuming office and turned it into a global debtor, and he has underinvested in education and alternative energy. “In breathtaking disregard for the most basic rules of fiscal propriety, the administration continued to cut taxes even as it undertook expensive new spending programs and embarked on a financially ruinous ‘war of choice’ in Iraq. A budget surplus of 2.4 percent of gross domestic product (GDP), which greeted Bush as he took office, turned into a deficit of 3.6 percent in the space of four years. The United States had not experienced a turnaround of this magnitude since the global crisis of World War II,” Stiglitz writes. “Up to now, the conventional wisdom has been that Herbert Hoover, whose policies aggravated the Great Depression, is the odds-on claimant for the mantle ‘worst president’ when it comes to stewardship of the American economy. The economic effects of Bush’s presidency are more insidious than those of Hoover, harder to reverse, and likely to be longer-lasting. There is no threat of America’s being displaced from its position as the world’s richest economy. But our grandchildren will still be living with, and struggling with, the economic consequences of Mr. Bush.”
Oh great, not only will our grandchildren still be paying for the wars in Iraq and Afghanistan, they will also have to deal with an economy trashed by BushCo as well? So I turned my attention from the Newsweek article to the one penned by Joseph Stiglitz. Mr. Stiglitz compares Bush to Hoover and finds that Bush has screwed the pooch far worse than Hoover did on his best day.
Mr. Stiglitz has this to say about BushCo’s tax cuts for the rich and how they have affected the middle and lower classes: “Inequality is now widening in America, and at a rate not seen in three-quarters of a century. A young male in his 30s today has an income, adjusted for inflation, that is 12 percent less than what his father was making 30 years ago. Some 5.3 million more Americans are living in poverty now than were living in poverty when Bush became president. America’s class structure may not have arrived there yet, but it’s heading in the direction of Brazil’s and Mexico’s.”(emphasis mine)
Thanks to Clinton, Bush inherited a surplus, which has now turned into a deficit. A big deficit my dear reader, when you consider the swing from surplus to deficit en total: “A budget surplus of 2.4 percent of gross domestic product (G.D.P.), which greeted Bush as he took office, turned into a deficit of 3.6 percent in the space of four years. The United States had not experienced a turnaround of this magnitude since the global crisis of World War II.”
Back to the value of the almighty dollar. Since 2001, the dollar has taken a 40% decrease in its value when measured against the euro. That is astronomical, even for my feeble, non-financial brain to comprehend. Lets talk about financing our debt via BushCo’s method..borrowing from China and other countries. As Mr. Stiglitz puts it ever so cleverly:
Meanwhile, we have become dependent on other nations for the financing of our own debt. Today, China alone holds more than $1 trillion in public and private American I.O.U.’s. Cumulative borrowing from abroad during the six years of the Bush administration amounts to some $5 trillion. Most likely these creditors will not call in their loans—if they ever did, there would be a global financial crisis. But there is something bizarre and troubling about the richest country in the world not being able to live even remotely within its means. Just as Guantánamo and Abu Ghraib have eroded America’s moral authority, so the Bush administration’s fiscal housekeeping has eroded our economic authority.(emphasis mine)
Ah yes, our moral compass is fucked as most of us know by now..but to learn our economic authority is in the crapper as well, it just makes me want to punch something. Now that Mr. Stiglitz has depressed me to the point of hunting down a bottle of wine to put in the freezer, I searched his piece for signs that the apocalypse isn’t upon us and that we can ‘right’ this ship that is being captained by the biggest fool our country has ever known. The following is what he had to say about fixing this friggin mess:
It means not spending money that we don’t have, increasing taxes on the rich, reducing corporate welfare, strengthening the safety net for the less well off, and making greater investment in education, technology, and infrastructure.
When it comes to taxes, we should be trying to shift the burden away from things we view as good, such as labor and savings, to things we view as bad, such as pollution. With respect to the safety net, we need to remember that the more the government does to help workers improve their skills and get affordable health care the more we free up American businesses to compete in the global economy. Finally, we’ll be a lot better off if we work with other countries to create fair and efficient global trade and financial systems. We’ll have a better chance of getting others to open up their markets if we ourselves act less hypocritically—that is, if we open our own markets to their goods and stop subsidizing American agriculture.
Increasing taxes on the rich? Heresy man! Even the Democrats don’t want to go down ‘that road’. Ending corporate welfare which masquerades as Ag subsidies? Good lord he’s crazy! But the interest we are paying, year after year, on the almost $4 trillion of increased debt burden—even at 5 percent, that’s an annual payment of $200 billion. Money that could be used to provide health care to every man, woman and child in America just for starters.
Will the future presidents have the balls to fix this mess BushCo has gotten us into without using more smoke and mirrors? I don’t know..and apparently Mr. Stiglitz doesn’t either. Friggin pathetic ain’t it?