Daily Archives: January 11, 2008

Impending Destruction of the US Economy

Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan Administration, and is the author of several books. His article on the Impending Destruction of the US Economy is both insightful and, in my opinion, accurate. No one can dismiss his statements as being the ranting of a liberal Democratic partisan. He sees clearly the dire situation faced by Americans as we see the limits being reached in the ability of our federal government to finance its debt. Here are a few excerpts from his article. I urge you to read it in its entirety. – thg

“Hubris and arrogance are too ensconced in Washington for policymakers to be aware of the economic policy trap in which they have placed the US economy. If the subprime mortgage meltdown is half as bad as predicted, low US interest rates will be required in order to contain the crisis. But if the dollar’s plight is half as bad as predicted, high US interest rates will be required if foreigners are to continue to hold dollars and to finance US budget and trade deficits.”

“Which will Washington sacrifice, the domestic financial system and over-extended homeowners or its ability to finance deficits?”

“Superpower America is a ship of fools in denial of their plight. While offshoring kills American economic prospects, “free market economists” sing its praises. While war imposes enormous costs on a bankrupt country, neoconservatives call for more war, and Republicans and Democrats appropriate war funds which can only be obtained by borrowing abroad.”